Survey: SA agribusinesses show high innovation despite challenges

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The South African Agricultural Business Innovation Survey (2019–2021), conducted by the HSRC’s Centre for Science, Technology and Innovation Indicators (CeSTII), on behalf of the Department of Science and Innovation (DSI), shows that 63.6% of agribusinesses had process innovations, while 38.5% had product innovations.

The survey, which covered animal and crop farming, forestry, and fisheries, aimed to measure the extent to which commercial agribusinesses in South Africa introduced new or improved products and business processes.

According to the HSRC’s Dr Yasser Buchana, who led the survey, these results demonstrate that South African agricultural businesses have shown remarkable resilience in the face of adversity, adapting and innovating their way out of the crisis.

“While there is still room for improvement compared to other countries in the Global North, with the right innovation ecosystem, supported by progressive sectoral innovation policies, our agricultural sector has the potential to withstand shocks and remain competitive, which is crucial for our country’s food security,” said Dr Buchana.

Moreover, the survey results also show that agribusinesses with innovations employed more people. They also expanded their market reach and developed their intellectual property more so than those without innovations.

Key findings:

Medium and large agribusinesses had the highest innovation activity rates

The highest percentage of businesses engaging in innovative activities (72.9%) was observed among medium-sized agribusinesses, closely followed by large agribusinesses (70.8%).

Small agribusinesses reported an innovation activity rate of 66.4%, while 57.2% of very small agribusinesses were classified as innovation-active.

Innovation-active agribusinesses are adopting advanced ICTs

The most prevalent advanced Information and Communication Technologies (ICT) adopted by agribusinesses were precision agriculture, air and soil sensors, and smart plant and animal breeding, with approximately 40% of all innovation-active agribusinesses utilising or implementing these technologies.

Moreover, over 50% of innovation-active businesses engaged in cereal and fruit production adopted precision agricultural technologies, while a significant number of innovation-active businesses in livestock production adopted Precision Livestock Farming technologies.

Europe is the largest international market for innovation-active South African agribusiness

Innovation-active agribusinesses sold or exported their products or services to diverse markets in South Africa and internationally, with 60,9% of fruit and related crop businesses reporting a presence in the European market.

Fruits and related crops, as well as vegetables and related crops, also showed growth in Asian markets (56.7% and 3.7% respectively).

The spread of innovation-active agribusinesses differed across provinces

In the Northern Cape, North West, and Western Cape provinces the highest proportions of all agribusinesses were innovation-active (87.3%, 90.0% and 75,2% respectively), with proportionally fewer innovation-active agribusinesses in KwaZulu-Natal (43.5%), Free State (55.7%) and Mpumalanga (55.1%)

Innovation-active agribusinesses had a higher proportion of employees

Innovation-active businesses accounted for the highest percentage of those employed in a sub-sector, with 82.4% of employees in the animal and crop farming subsector working in innovation-active businesses, 69.8% in fisheries and 59.1% in forestry.

Agribusinesses turned to innovation to support varied outcomes

In the animal and crop farming subsector, approximately 22.7% of agribusinesses rated the importance of increased revenue resulting from innovations as “high”. Reduced cost resulting from innovations was rated highest by forestry businesses (21.4% of innovation-active businesses).

In terms of environmental benefits, 26.2% of animal and crop farming businesses placed high importance on soil fertility, and 41.0% of forestry businesses highlighted the importance of increased water preservation and biodiversity preservation.

Barriers to innovation included human capital, technological and market access

Businesses in the forestry subsector faced significant challenges related to labour shortages, with 87.6% of forestry businesses rating the lack of access to labour as a highly important factor impeding innovation. Access to ICT was rated a highly important barrier for approximately 15% of businesses in animal and crop farming and 17.9% of forestry businesses.

Co-creating evidence for policy

According to CeSTII’s executive head, Dr Glenda Kruss, the DSI’s goal is to harness science, technology and innovation to build a vibrant and economically sustainable agricultural sector, through bio-innovative technologies, products, processes and services contributing to increased productivity, competitiveness, food security and rural economic development.

"The Agricultural Business Innovation Survey data provide fresh evidence on the innovation capabilities of firms in the three sectors, which will be of value to inform the design of a national Agriculture Science, Technology and Innovation Roadmap.

"The data are equally significant for monitoring the implementation of the Agricultural, Forestry and Aquaculture Master Plans. We look forward to engaging with policy actors and other sectoral stakeholders to draw out relevant policy evidence and insights from the data," said Dr Kruss.

Download and view the full report here.