Keywords

11.1 Introduction

In this book, approx. 80 megatrends have been identified. Most of them can be shown empirically, and it has been possible to make fairly confident predictions about whether they will continue in the future. However, some are more difficult to document statistically, although the underlying drivers can be identified and explained. Others are cyclical or come in waves. In many cases, economic theories, e.g., supply and demand and economics of scale can be applied to support the assertion that they are stable trends that will continue.

All the identified megatrends will continue as long as no major unforeseen disruptive events occur. Unexpected game changers can alter the course and direction of historical megatrends.

Finally, new megatrends will probably emerge, i.e., future global trends with no long-term historical roots.

This chapter discusses selected and potential future disruptions, i.e., incidents which may destroy or fundamentally change previous megatrends. Disruptions can be divided into the following categories:

  • Economic-political

  • Trade-based

  • Technological

  • Nature-based

Economic-political disruptions include relations between countries which are self-created and which can be controlled and influenced. In extreme cases, disruptions may include or create geopolitical conflicts such as war or the threat of war in parts of the world.

Trade-based disruptions involve fundamental changes to the current international trading system resulting in globalization in the form of trade between countries being significantly reduced. Countries and regions are becoming more self-sufficient, and in this respect, agriculture and food play a central role. Fundamental changes to the international trading system are often the consequence of economic, political or natural disruptions.

Technological disruptions include advances in technology. New and more efficient ways of producing agricultural and food products may be developed, thereby making traditional production systems redundant. Disruptions may also take the form of changes in resource allocation such as robotics, artificial intelligence (AI), value chain integration, blockchain, etc. Technology may replace and reduce the use of labor—mostly unskilled labor—and agricultural land.

Environmental disruptions include natural disasters, pandemics, climate change, etc., which means they are primarily external and cannot be prevented—at least not in the short term.

The scope and the potential impact of the disruptions presented above may vary widely.

11.2 The End of Globalization?

Are we facing the end of globalization? This question has been asked many times recently, cf. for example Box 11.1.

Box 11.1 Statements and assessments regarding the future of globalization

The end of globalization?

Business leaders face significant risks if the world becomes more fragmented (Girod, 2016)

Globalization is not slowing or stalling. Rather, it is evolving, driven by trade in human skills, knowledge and ingenuity (WTO, 2019)

It’s the End of Globalization as We Know It (and That’s Probably Fine), But it doesn’t mean we’re entering an era of deglobalization (Lincicome, 2022)

There are strong signals that the era of globalization is coming to an end (Keller & Marold, 2023)

Deglobalization is a short-term trend, we will get back to our old numbers

Virtual roundtable speakers are optimistic about our global future but say it will take on a different form (Bris, 2020)

Is globalization dead?

If World War One didn’t stop globalization, if World War Two didn’t stop globalization, what makes you think the war between Ukraine and Russia is going to stop globalization? (Friedman, 2022)

  1. Source Selected headlines and extracts from cited sources

The simple answer to the question is that there are no clear signs of declining globalization in the agricultural and food industry: international trade in agricultural goods is on the increase while agricultural support in the OECD is on the decline and is now at its lowest level since 1986—both of which are important factors in supporting globalization when it comes to agriculture, the food industry and food markets, cf. Fig. 11.1.

Fig. 11.1
A line graph plots trade and agricultural support versus the year. Agricultural support, (1985, 38), (1995, 35), (2005, 27), (2020, 15). International trade with agricultural products, (1985, 140), (1995, 163), (2010, 180), (2020, 219). Values are estimated.

(Source Own presentation based on statistical data from OECD and WTO)

Agricultural support and international trade in agricultural products, 1986–2021

The figure reveals two trends:

International trade in agricultural goods (measured as a percentage of total agricultural production) is increasing from year to year. The long-term trend is relatively clear, although a decline occurred in some years. For example, international trade decreased in 2020, which was largely due to the Covid-19 pandemic and the resulting disruption to the global transportation of goods. However, the long-term development indicates that the share of the world's agricultural production that is traded on an international market will increase.

Agricultural support in the Western World has exhibited a downward trend in recent decades. In 2022, agricultural support amounted to, on average, just under 13% of total agricultural turnover, which is the lowest level in the period shown and is less than half the level it was in 1986. Low agricultural support and trade liberalization strengthens the conditions for international trade and means that globalization is likely to increase.

Globalization includes more than just international trade. Foreign direct investments are also part of globalization, and despite the occurrence of annual fluctuations, which are often the result of macroeconomic or political instability, they are also increasing in agriculture and the food industry and indeed in all industries combined.

Although the trends indicate continued globalization in the future, the following political conditions may limit or reverse globalization in the short or long term:

  • Tension between current and potential superpowers increases uncertainty and risk in international trade and especially in investments abroad.

  • Food crises, expensive food and sometimes a lack of food encourage politicians and others to push for for greater self-sufficiency and protectionism.

  • The climate crisis may make international trade over long distances less attractive.

  • Higher energy prices, which are likely to be a long-term condition, will favor local sales and inhibit international trade.

Considered over a very long-time horizon, the extent and importance of globalization have varied significantly. During economic recession, world wars and global crises, globalization decreases in terms of the importance of international trade. After World War II, production, economic activity and international trade increased. The end of the Cold War and the fall of the Berlin Wall, increasing trade liberalization and an increase in the number of market economies in the 1990s gave further impetus to globalization.

In contrast, in this millennium, the financial crisis, pandemics, wars and increasing protectionism have dampened globalization. The various phases of globalization are outlined in Fig. 11.2.

Fig. 11.2
A line graph is divided into five sections, industrialization and globalization, wars, interwar period and protectionism, post-war globalization, hyper-globalization, and deglobalization. (1875, 11), (1925, 12), (1950, 10), (1975, 15), (2025, 23). Values are estimated.

(Source Own presentation based on Fouquin and Hugot [2016], Keller and Marold [2023] and statistical data from FAO and World Bank)

Value of exported goods as share of GDP, 1875–2022

The figure indicates that whether globalization including increased international trade and cooperation will continue in the future is not a foregone conclusion. Deglobalization, slowbalization or reduced globalization occurred after the financial crisis, and the geopolitical situation, the extent of protectionist interventions, etc., may further reduce globalization in the coming years.

The overall assessment is that “the end of globalization scenario” would be extremely disruptive and would interfere with many existing political and market megatrends. However, as liberalization and increasing international trade contribute to greater economic welfare, no country will have an economic incentive to change the trend. Nevertheless, there is always the possibility that political interests will lead to changes, cf. Sect. 11.2.

11.3 Geopolitical Instability and Disruptions

The current geopolitical situation is typically considered when companies analyze the attractiveness of markets. The presence of political instability including political interventions and barriers may be decisive for a company’s decision about whether to export to or invest in a country.

Political conditions, including geopolitical conditions and disruptions, are important for agriculture, the food industry and food markets. The following two factors are especially important:

  • Food is a very basic necessity, which means that access to markets, supply chains and infrastructure is crucial for daily deliveries of food—and thus crucial for people’s survival. Geopolitical instability and disruptions can destroy these supply chains.

  • Political trade barriers, protectionism and national interests in the security of supply are likely consequences of geopolitical instability.

Therefore, geopolitical instability is both a likely and an effective disruption, which will affect megatrends in agriculture, the food industry and food markets.

Quantifying, comparing and not least predicting geopolitical instability and disruptions is a difficult task. The degree of instability is often a subjective assessment, and the factors behind instability may be random or irrational. However, Fig. 11.3 indicates that instability—calculated as deaths in state-based conflicts around the world—has been decreasing in recent decades.

Fig. 11.3
A column chart plots deaths per 1.000 people versus the year. (1945, 300), (1950, 600), (1970, 380), (1990, 98), (2005, 10), (2015, 120), (2020, 170). Values are estimated.

(Source Own presentation based on Herre et al. [n.d.] and own estimates for 2021 and 2022)

Deaths in state-based conflicts in the world

The figure shows that since the Second World War, there have been three peaks in war deaths: the Korean War (early 1950s), the Vietnam War (around 1970) and the Iran–Iraq and Afghanistan wars (1980s). The 1990s and 2000s witnessed relatively few war deaths. However, there has been a recent increase in war deaths as a result of conflict in the Middle East, particularly in Syria, Iraq and Afghanistan. Russia's invasion of Ukraine resulted in a large increase, although the real numbers are uncertain.

When certain time periods are examined in more detail, some interesting patterns can be identified.

The 1990s witnessed relatively few war deaths, and it was also a geopolitically relatively stable decade with no major international conflicts, despite the fact that some major changes occurred. The Berlin Wall had just fallen and Germany was reunited. The former Eastern European countries were democratized and integrated into international trade. However, the decade was also characterized by war in the former Yugoslavia. More than 150,000 people were killed, many more injured and millions of people displaced from their homes in the wars from 1991 to 1999. However, these were primarily local wars which did not involve any significant interference from the major powers.

The EU was enlarged from 12 to 15 members. China began a period of great economic growth. Offshoring from the West to Asia, especially China, reduced costs and inflation was low. IT development and digitization created further growth.

Regarding agriculture and food, a continued increase in trade liberalization and increasing international trade was evident. In 1994, NATO confirmed that other European countries could join the alliance, and over the next 10 years, 7 new European countries became NATO members. This expansion and subsequent negotiations with former Soviet Republics affected the balance of power, strengthened the US's position as a superpower, but also probably contributed to subsequent geopolitical instability starting with Russia's invasion of Crimea in 2014.

Therefore, the 1990s were a stable decade. However, in retrospect, it was not a new normal situation in balance. The following years were characterized by international terrorism, wars and a change in the balance of power. Several observers even predict that the coming decades also will be characterized by increasing international instability and turbulence, cf. for example Zeihan (2022) and Turchin (2016).

With the development in recent decades, the general expectation is that the distribution of power between nations is changing: We are in a transition from what was a more or less unipolar world to a much more bi- or multipolar world. Figure 11.4 presents a schematic and simplified illustration of the current distribution of power in recent decades.

Fig. 11.4
A schematic of a rectangle titled Degree of polarity. There are dashed vertical lines labeled U K, U S A and U S S R, U S A, U S A and China, India, Russia, and E U. At the top are four concave-down curves labeled unipolarity, bipolarity, unipolarity, bipolarity, and multipolarity.

(Source Own presentation)

Power distribution among states and polarity: Schematic and simplified illustration

The figure shows that the USA’s position as the sole superpower ended in the 2010s. What had previously been a unipolar system was initially replaced by a bipolar system, which may develop into a multipolar system.

Unipolarity means that one single nation is superior to the others in terms of power as it possesses a significant share of global resources. In a bipolar system, two superpowers compete, while in a multipolar system, three or more almost equal superpowers compete. Multipolarity means a balance between several powers, none of which manages to dominate the others. In such a situation, countries will theoretically strive to achieve a dominant role. However, the degree of superpower is always discussed and cannot be objectively determined.

Being a superpower means that the country is able to influence the actions of other countries or regions. This ability, hegemony, is the result of several strengths:

  • Economic: Large GDP, large share of international trade and investments

  • Political: Strong leadership, credibility and influence

  • Military: Military expenses, army size

  • Cultural: Dominance of media and cultural products

  • Technological: Engineering, IT, artificial intelligence

  • Demographic: Population

  • Natural Resources: Land, energy, minerals

  • Alliances: Membership of economic, political or trade alliances

The strengths listed above are very different and can be difficult to quantify, compare and, not least, balance. However, any potential change in the balance of power and a possible transition from a unipolar to a bipolar or multipolar system can be inferred by comparing economic, military and trade key figures:

In 2017, China overtook both the USA and the EU in terms of gross domestic product (GDP) calculated as purchasing power parity (PPP). China has the world's largest economy, and the gap between both the USA and the EU has subsequently increased considerably, cf. Figure 11.5. China’s economic size implies that the country can influence the world economy through its economic growth, consumption, foreign investment, etc.

Fig. 11.5
A multi-line graph titled U S D trillion plots G D P, P P P versus the year. Russia, (1990, 4), (2005, 3), (2020, 4). India, (1990, 2), (2010, 5), (2020, 9). China, (1990, 2), (2010, 10), (2020, 23.5). U S A, (1990, 10), (2010, 16), (2020, 20). E U, (1990, 13), (2010, 16), (2020, 20). Values are estimated.

(Source Own presentation based on statistical data from World Bank)

GDP, PPP (constant 2017 international USD)

In terms of military strength, which is also an important characteristic of a superpower, the USA is dominant. The US’s total military expenditures are almost 3 times as large as China’s, which has the world's second largest military expenditures, cf. Figure 11.6. Military expenditure does not say anything definitive about, e.g., the military's effectiveness, number of soldiers, superiority or alliance cooperation, but it is nevertheless an important indicator. It is worth noting that China’s military expenditures have increased significantly since the early 2000s.

Fig. 11.6
A multi-line graph of military expenditure in U S D, trillion versus the year. India, (1990, 0), (2010, 0.05), (2020, 0.05). China, (1990, 0), (2010, 0.15), (2020, 0.3). E U, (1990, 0.05), (2010, 0.25), (2020, 0.21). U S A, (1990, 0.3), (2010, 0.8), (2020, 0.85). Values are estimated.

(Source Own presentation based on statistical data from World Bank)

Military expenditure (current USD)

Foreign direct investments (FDIs) may also reinforce the position of a superpower. Through FDIs, a country can influence the development of foreign companies and countries. Small countries will typically have a relatively large number of FDIs, while large countries will have relatively few. Therefore, collectively, the EU countries have a relatively large number of FDIs, although many are located in other EU member states. In terms of FDIs, China has experienced major growth in recent years, and the number of FDIs is now approaching the level of the USA, cf. Fig. 11.7.

Fig. 11.7
A multi-line graph plots F D I s, net outflows in U S D, trillion versus the year. India, (1990, 0), (2010, 0.02), (2020, 0). China, (1990, 0), (2010, 0.03), (2020, 0.05). U S A, (1990, 0.05), (2010, 0.4), (2020, 0.2). E U, (1990, 0.06), (2010, 1.18), (2020, 0.4). Values are estimated.

(Source Own presentation based on statistical data from World Bank)

FDIs, net outflows (BoP, current US$)

The external balance on goods and services is a key figure, which indicates the economic maneuverability of countries. Developments in recent decades reveal two trends in the world's largest economies: China is increasing its trade surplus, while the USA is increasing its trade deficit, cf. Fig. 11.8. The trade between the two countries is the main reason for the different developments in the two countries, which leads to the following conclusions:

Fig. 11.8
A multi-line graph plots the external balance on goods and services versus the year. U S A, (1990, negative 0.1), (2010, negative 0.4), (2020, negative 0.9). India, (1990, 0.0), (2010, negative 0.1), (2020, negative 0.1). China, (1990, 0), (2010, 0.3), (2020, 0.5). Values are estimated.

(Source Own presentation based on statistical data from World Bank)

External balance on goods and services (current US$)

  • In general, China is the most internationally competitive of the two countries.

  • The USA and China are highly dependent on each other when it comes to trade.

  • The USA rather large trade deficit must be seen in the context of the free trade agreements that the USA has entered into—and will enter into in the future.

  • Large differences in the countries’ trade balances may contribute to instability in the world economy.

China’s role in international trade has also increased significantly in recent decades: As early as 2006, China overtook the USA as the world’s most significant player in international trade cf. Fig. 11.9. China now accounts for almost 20% of the world’s total imports and exports, and the country is the world’s largest importer and exporter. This situation is a consequence of China’s strong international competitiveness, and it strengthens China's role and importance in the world market and when it comes to international trade policy.

Fig. 11.9
A multi-line graph plots the share of total world trade versus the year. Russia, (1990, 0), (2010, 2), (2020, 2). China, (1990, 6), (2010, 14), (2020, 19). U S A, (1990, 13), (2010, 10), (2020, 11). India, (1990, 0.5), (2010, 1), (2020, 2.1). Values are estimated.

(Source Own presentation based on statistical data from FAO)

Share of total world trade (export + import)

With regard to international food trade, the USA and the EU are the largest players with almost the same share of the world market, but with a slightly decreasing or stagnant share of the world market. China is the third largest player in the world food market, but its world market share is increasing rapidly, cf. Fig. 11.10. China has changed from being a net exporter to a net importer of food (2004), and in 2021, the country was the world's largest importer and net importer of food.

Fig. 11.10
A multi-line graph plots the share of the total world food trade versus the year. India, (1990, 0.2), (2010, 1), (2020, 2). China, (1990, 2), (2010, 4), (2020, 7). U S A, (1990, 10), (2010, 9), (2020, 10). E U, (1992, 13), (2010, 11), (2020, 10). Values are estimated.

(Note EU is extra-EU trade. Source Own presentation based on statistical data from FAO)

Share of total world food trade (export + import)

This means that China has a great interest in maintaining a stable and well-functioning world market: Firstly, because China is the world's leading exporter and importer, the country is dependent on international trade. Secondly, China has a great economic and political interest in ensuring access to a well-functioning international food market that can meet its import needs.

Predicting the future geopolitical power balance is difficult, as many factors contribute to the development of a superpower. Historically, power balances have changed continuously, and the development so far indicates changes in both the short and long term. Several countries are challenging the hitherto unipolar world system: Countries such as China, Russia, India and Turkey want to increase their geopolitical role, and China is considered a superpower parallel to the USA. The BRICS alliance (Brazil, Russia, India, China and South Africa) is building increasing political and financial platforms and aims to provide an alternative to Western leadership. The political, military and economic role of the EU is also increasing.

This means that a long-term period of geopolitical stability without disruption, which we experienced from the beginning of the 1990s until the beginning of the 2000s, is not expected in the future.

Instability and disruptions can also be considered a dynamic development, so it can be both positive and negative—depending on one's role and position. Ongoing changes to the hierarchy and the balance of power are natural events. It is unfortunate that such shifts in power may lead to economic, political or military disruptions to the detriment of humanity as a whole.

11.4 From Retail to E-Commerce

As discussed in Sect. 4.8, substantial structural changes and waves have occurred in food retail, and they can be expected in the future. One potentially significant wave is already in its infancy: e-commerce, or e-trade or online trade, whereby trading in large parts of the value chain—including the present retail link—takes place electronically. If this wave continues to grow and perhaps becomes dominant, it will disrupt the entire value chain.

Box 11.2 Definitions

  • Retail is the sale of goods at a physical location, where the seller and the buyer meet in person.

  • E-commerce is the buying and selling of goods on the Internet, so it includes a broad set of activities such as e-tail, electronic financial services, mobile commerce, etc.

  • E-tail or e-tailing is an abbreviation of electronic retailing and refers to selling retail products and services on the Internet.

If this does occur, the importance of retail trade as physical logistical centers where customers physically turn up to buy food will decline. Instead, digital companies such as Alibaba and Amazon will expand and change the retail landscape.

The significance of e-commerce is increasing and will continue to increase in the future according to the studies that have been carried out. The extent of the growth varies between countries, but the trends are relatively uniform.

E-commerce is especially important when it comes to B2B, while B2C in the food and beverage categories is low. However, the Covid-19 pandemic did result in changes and strong growth in online grocery retailing, from which there seems to be no turning back, cf. for example McKinsey (2022).

Data from the USA illustrates these trends and patterns, cf. Figs. 11.11 and 11.12.

Fig. 11.11
A multi-line graph plots the food and total E-commerce versus the year. Total, (1998, 10), (2010, 30), (2020, 70). Food, (1998, 10), (2010, 48), (2020, 70). Values are estimated.

(Source Own calculations based on statistical data from the United States Census Bureau)

Food and total E-commerce (food and total manufacturing) as a share of total sales: US Manufacturing Shipments

Fig. 11.12
A multi-line graph plots the food and total E-commerce versus the year. Total, (1998, 0), (2010, 4), (2022, 15). Food and beverage, (1998, 0), (2010, 0.5), (2022, 12). Values are estimated.

(Source Own calculations based on statistical data from the United States Census Bureau)

Food and total E-commerce (food and total manufacturing) as a share of total sales: Retail

The figures show that e-tail accounts for rather small market shares compared to manufacturing shipments, but high growth and increasing market shares are apparent in both cases. Food and beverages account for a low market share of e-tail, but the share increased from 2016 to 2019, while the share increased significantly from 2020. In 2022—a post-pandemic year—the level was high compared to the pre-pandemic years.

The figure confirms that food is a special case when it comes to e-tail: The increase in online sales of fresh produce is much slower as many consumers want to select the products themselves. According to Mascaraque (2021), globally, the packaged food industry is one of the FMCG industries (fast-moving consumer goods) with the smallest penetration in terms of e-commerce.

The long-term perspectives are far-reaching: the trend toward more e-commerce at the expense of retail is complicated—or reinforced—by the increasing role of food services. As discussed previously, consumers are demanding more leisure time, which means less time is spent in the kitchen, while the amount of time spent on traditional shopping in supermarkets will probably be reduced in step with increasing welfare.

E-commerce and e-tail will change the food value chain—the question is just how much and how fast. The existing food value chain will definitely continue, but the digital players will supplement the existing system and/or be the main players.

E-commerce will have an impact on agriculture, the food industry and food markets. The fight for dominance in the value chain will continue. Who will be the strong link between the food industry and the consumer, and how will they be connected?

The traditional food retail industry may suffer in two ways: E-commerce may make physical supermarkets redundant, and food services, catering, takeaways, etc., may also reduce physical supermarkets’ sales and activities. Supermarkets must transform themselves so that they are also logistical centers and food service units if they want to secure their position in future food value chains.

Amazon, Alibaba and similar online stores will probably move further into food retail as younger generations, who are more motivated and prepared for e-tail, become more important target groups.

11.5 Artificial Meat

Artificial meat is a potential technological disruption that may have a major impact on the entire food system.

Artificial meat has many different names: lab-grown, in vitro, cultivated, cultured, cell-based, cell-grown or non-slaughter. Artificial meat is real meat that has been grown directly from animal cells, but it is produced without living animals, so the products are not vegan, vegetarian or plant based.

The production of artificial meat starts by taking a sample of cells from a live animal via a small biopsy, or from a fertilized chicken egg. The meat cells are then grown in bioreactors in a special solution that includes amino acids, glucose, vitamins, inorganic salts, proteins and other and other nutrients that stimulate growth. The cells double every 24 hours, approximately, and it normally takes 2–8 weeks to produce the meat depending on what kind of meat is being cultivated.

According to scientists from Oxford University and the University of Amsterdam, artificial meat involves approximately a 7–45% reduction in energy use, a 78–96% reduction in greenhouse gas emissions, a 99% reduction in land use and a 82–96% reduction in water use compared to conventional meat production depending on the type of meat being produced.

According to David Kaplan, a professor of biomedical engineering at Tufts University (Rogers, 2023), the artificial meat industry is about 10 years old, “so the products are still a few years away from being commercially available in grocery stores or restaurants—and maybe up to 20 years out from replacing a substantial portion, or all, of the traditional meat industry”.

However, several significant barriers to the upscaling and production of artificial meat production have been identified cf. Humbird (2020), Fassler (2021), Chriki and Hocquette (2020): Low production growth rates, inefficiency in production, lack of profitability and delays have been highlighted as significant problems. Furthermore, consumer acceptance is a potential market problem (IPCC, 2022).

The development and commercialization of artificial meat is driven by the following factors:

  • Reduction of methane emission from livestock

  • Reduction of land for production of feedstuff for livestock

  • Potential reduction of demand for water

  • Animal welfare

  • Waste reduction

  • Food security and food safety might be improved

If artificial meat at some point becomes a realistic technological and economic alternative to conventional meat, it will disrupt the livestock industry and the entire integrated value chain. It would mean that swathes of agricultural land could be used for other purposes. However, the time horizon, scope, economic attractiveness and technological barriers still represent significant uncertainties.

11.6 Vertical Farming

Vertical farming is an alternative system for cultivating crops, whereby production takes place indoors, in several layers and under controlled conditions, often with artificial light and no soil. Instead, the plants are planted in a water-based nutrient solution. The advantages of vertical farming are that it is not affected by the vagaries of weather, it requires less water and much less land, the leaching of nutrients into the environment is dramatically reduced and the need for pesticides is potentially eliminated. The fact that the growing conditions can be controlled to such a great extent means that it is possible to grow plants of a uniformly high quality, although this requires close monitoring of the micro-climate and the efficient use of resources.

The concept of vertical farming was developed because it had the potential to provide large urban populations with locally grown food. The main objective of vertical farming is to maximize yields with the minimal use of natural resource. The small amount of land needed for vertical farms means food can be grown in cities. Singapore, Dubai and Riyadh, which are characterized by a high population density and poor natural conditions for traditional agricultural production, are examples of cities where large-scale vertical farming has been established.

Vertical farming has the potential to contribute to a more stable and resource-efficient food production in a world characterized by climate change and limited access to both agricultural land and water. The food is produced locally, and both food safety and food security will probably be improved.

However, several unresolved issues regarding long-term advantages and disadvantages make the business case uncertain.

Utilizing resources efficiently and reducing the carbon footprint are still challenges in vertical farming as the amount of energy needed for heating, ventilation and light is in many cases higher than it is in traditional production. In many cases, the electricity used to run vertical farms is still derived from fossil fuels, which means total greenhouse gas emissions may be far higher than they are in traditional farming. Switching to renewable energy sources would be one way of reducing the carbon footprint.

Furthermore, identifying the plant species that are suitable for vertical farming requires further research and innovation, cf. for example Park (2023) and University of Copenhagen (n.d.). Several advantages and disadvantages of vertical farming have been identified, cf. for example University of Copenhagen (n.d.) and Senmatic (n.d.), and they are presented in the boxes below:

Potential advantages

  • Reduced use of land and water

  • High productivity

  • Increased food security

  • Reduced waste

  • No use of pesticides

  • Independent of natural conditions

  • Local production, reduced transportation

  • Year-round production

Potential disadvantages

  • High energy consumption

  • Consumer/market skepticism

  • Limited number of suitable crops

  • Large upfront capital investment

  • Demanding management

  • New technology

  • Effect on sustainability is uncertain

On the one hand, vertical farming has the potential to solve several megatrend problems. At the micro level, the use of resources such as water and land is relatively limited, and the same applies to pesticides. As the production systems are closed, waste regarding fertilizer use is also limited. In general, waste can be reduced considerably, as losses due to pests, adverse weather, long transportation, etc., can be eliminated or significantly reduced.

On the other hand, several technological, market and economic challenges limit the potential for scaling up. Vertical farming may be an excellent local solution, but vertical farming is unlikely to significantly affect the existing megatrends within agriculture, the food industry and food markets.

11.7 From Agriculture and Farms to Bio-Industrial Companies

Traditional agriculture has largely remained unchanged for millennia. Agricultural production has been based on utilizing soil, water, photosynthesis, nutrients and livestock. Production has taken place on relatively small, often family-owned units, agricultural holdings, spread over large areas. Development has taken the form of gradual industrialization in most developed countries, while the majority of agriculture worldwide remains subsistence farming.

In the future, agricultural development is likely to remain highly polarized between developed and developing countries, and also between industrialized agriculture and part-time agriculture in most countries. Market diversity will probably increase, and the market segments for organic, vegetarian and local food, etc., will remain and probably become more important.

However, radical changes can be expected in the next century. In the most advanced countries, agriculture will become a bio-industrial industry, which means that traditional agriculture will become redundant to a certain extent. In particular, traditional animal production will be replaced by biotechnological production in the Western world.

This change is driven by both supply and demand:

On the supply side, such a change is driven by continuous biotechnological advances. As discussed in Sect. 11.5, if artificial meat becomes technologically feasible and competitive with traditionally produced meat, it may well disrupt the existing food system. In the longer term, technology may become even more important in both animal and plant-based agriculture.

On the demand side, consideration of climate change, natural resource protection, animal welfare, the spread of livestock diseases, vegan and vegetarian trends and food safety will support this development.

Will we be more dependent on food that has been produced in a laboratory in the near future? Will biotechnological factories to some extent outcompete current agriculture, so that we can buy cheaper synthetic food which involves the limited use of resources? If so, we may well be able to produce food with fewer inputs, reduced waste, reduced CO2 emissions, improved animal welfare, while at the same time freeing up agricultural land for nature, forests and energy? Can we to a certain extent and in particular parts of the world “bypass” the existing and traditional agriculture?

The greatest uncertainty—but also the greatest potential—is probably to be found on the supply side. A number of new technological disciplines and breakthroughs have been developed or can be expected to happen within a period.

Synthetic biology is a new albeit poorly defined field of research, which is based on many scientific techniques and approaches. The main goal of synthetic biology is to create fully operational biological systems from the smallest possible components including DNA, proteins and other organic molecules. The creation of artificial life is one of the goals of synthetic biology.

Synthetic biology is also the basis of cellular agriculture, the aim of which is to develop new methods for producing food and other products that would otherwise be produced by traditional agriculture, most notably proteins and fats for food products.

In any case, the extent of the impact of biotechnology on agricultural production in the future will depend on the outcome of the debate concerning the ethical implications of the technology. However, the question is whether the development of biotechnology can be limited to specific geographical regions when we live in a globalized world. The application of biotechnology in one part of the world will put competitive pressure on the rest of the world. Therefore, biotechnology will become a necessary part of agriculture throughout the world, and biotechnology will just add further momentum to the agricultural treadmill.