This year, machine learning and automation are poised to transform economies around the world. Three areas which will experience many of these technological advancements are agriculture, vegetable processing and local governments.
But it won’t just be these sectors that should be preparing themselves, businesses across all sectors should start planning capital expenditure around these themes now, to put themselves in the best position possible to benefit from these trends and remain competitive.
As the Australian Local Government Association’s (ALGA) Plan for an Innovative and Prosperous Australia states, local government is responsible for community infrastructure with an estimated replacement value of $438 billion.
As a significant national asset, infrastructure requires constant investment and maintenance. Moreover, ALGA’s plan has committed $200 million per year for five years to support community infrastructure, the economic impact of which is estimated to be $1.07 billion in additional GDP.
Against this backdrop, local governments must also think about how new technologies can help close the many gaps in local infrastructure and improve maintenance processes. An example of this, is the potential to use robotics in local road maintenance.
According to the National Australia Bank’s report, 5 agri-technologies to watch, ground-based sensor technologies that measure plant health; satellite mapping apps; and camera drones, are three fast growing tech trends which are transforming the farming industry.
Investing in new technologies is one way to maintain a farm’s value and at the same time increase yield. One of the biggest challenges for agribusiness is deciding which technologies to invest in given the many options farmers now have to improve productivity.
New technologies also have a downstream impact in agribusiness. In particular, processing technologies will become increasingly important for Australia as we cement our position as Asia’s food provider.
To generate the highest revenue possible from this strategy, Australia must do more than just grow food. Our ability to add value in the supply chain by also processing produce will provide many opportunities for businesses across the country.
The best of these businesses will continually assess future capex requirements to stay ahead of the game. This is especially important given research shows there is an opportunity for this industry to pursue a turnaround strategy.
IbisWorld research notes that higher competition in the local market from imports and high operating costs have resulted in flat industry growth in the vegetable processing sector. Industry revenue has been flat at $5.5 billion since 2011 and industry revenue is expected to dip by 1.1 per cent during the 2016/17 financial year.
One way to counteract this downward trend is to take advantage of new technologies such as machine learning to analyse rainfall and weather patterns to determine what crops to plant and when, to help manage costs and maintain margins.
With all this action happening across so many sectors, and drawing on so much new technology, now is the time for businesses to think about their future plant and equipment needs.
How these will be funded is core to this planning process. The idea is look at how to use the business’ balance sheet in the most appropriate way so the company has access to the best technology possible to maintain and even improve its competitive position.
The start of a new year is a great time to devise a forward-looking strategy for the technology investments the business needs to make. Make 2017 the year you make the most of the new technology available in your industry to help drive future profits and growth.
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