Introducing: LUKB Smart Farming
Agriculture as we know it has to change in order to feed the growing world population sustainably. The key to achieving the modernization of farming: applied innovation.
The Singularity Group (TSG) screens the global equity universe for applied innovations. With the help of the Singularity Think Tank, an international community of technology experts, we continuously map which future technologies are on the horizon, which are generating revenues in markets today, and which established innovations should no longer be of interest to investors. Our innovation screening methodology can quickly and effectively confirm whether an emerging investment theme is mostly hot air or really taking off and creating value. After launching the Singularity Reshoring Strategy last year, we are now introducing LUKB Smart Farming.
The Need for Smart Farming: How to Feed the World Sustainably?
Feeding a growing global population, which is expected to cross 10bn people by the 2060s, requires more agricultural land and places high demands on production efficiency. At the same time, to ensure that the supply of high quality food can be guaranteed for future generations, our planet’s finite natural resources and overexploited ecosystem depend upon a sustainable use of land and water.
Over the past decades, governments and non-profit organizations have initiated countless initiatives to address these concerns, yet the World population facing food insecurity is still on the rise (see below). Meanwhile, land available for agriculture runs against its limits. This situation calls for technological innovations that can help farmers to increase agricultural productivity at a rate that ensures food security and sustainability for future generations. Growth in agricultural productivity occurs when farmers enhance the production of crops, livestock, or aquaculture products without increasing the use of land, labor, capital, fertilizer, feed, and livestock. This transformation of agriculture as we know it is called Smart Farming.
Innovation Leaders in Smart Farming
Based on growing revenues from innovations in Smart Farming, we introduce an Actively Managed Certificate (AMC) on Smart Farming, a collaboration with Luzerner Kantonalbank (LUKB) that captures global innovation leaders driving the modernization of how we produce food. The AMC initially covers 14 Large-, and Mid-cap companies in the U.S. and Europe (Switzerland, the U.K., France, and Sweden). The certificate aligns with the U.N. Sustainable Development Goals (SDGs), including those targeting Zero Hunger, Good Health and Wellbeing, Clean Water and Sanitation, and Responsible Consumption and Production.
The figure below shows that these are not predicted hypes but real trends that have started to materialize and that are gaining traction. Innovation-linked revenues are at the core of this increased growth, driving value creation for the industries and systems that smart farming impacts across three key domains: Robotic Equipment & Automation, AI & Data Analytics, and Biologicals & Additives.
Company Examples: WaterTech and Precision Farming
Within the subtheme Robotic Equipment & Automation, companies producing solutions for autonomous spraying, harvesting, planting, and weeding are coupled with technologies such as GPS or AI capabilities to increase productivity and save resources like water, fertilizer, and energy. Innovation leaders in this field include Bucher Industries AG (Singularity Innovation Score (SI-Score): 42) which manufactures agricultural robots and equipment that are integral to Smart Farming. For instance, robotic precision sprayers with advanced sensors and AI algorithms apply pesticides, herbicides, and fertilizers only where needed as they traverse the field.
Another focus area within this sub-theme concerns WaterTech solutions that automate and optimize water usage, as well as technologies for water filtration, wastewater treatment, and precise water delivery to crops. E.g. Valmont Industries’ (SI-Score: 31) “Center Pivot Irrigation” systems use cameras, sensors, and other smart devices to collect data on plant health, soil moisture, and pest activity. This not only conserves water resources but ensures that crops receive the optimal amount for growth.
AI & Data Analytics technologies also have a strong impact on Smart Farming. AI’s potential shines in areas where data analytics can increase operational efficiencies and optimizes decision making. In addition, bioanalytical techniques can help seed producers and farmers identify the best strains and breed for improving crop quality and yield. In connectivity technologies, AI enables farmers to manage agricultural vehicle fleets, crops, and livestock, and monitor the operations, performance, and maintenance of equipment. Modeling and simulation software leader Trimble (SI-Score: 41) plays into the Smart Farming theme through its development of advanced positioning, automation, and data collection technologies, enabling precise farming practices that improve crop planning, monitoring, and harvesting efficiency.
Finally, in the area of Biologicals & Additives, we cover advancements in seed technology, biological products for enhancing crop production, resilience, and soil health, as well as animal nutrition for optimized animal health. These innovations are crucial for improving crop yields, soil quality, pest reduction, and overall sustainability. American specialty chemicals producer Ashland, Inc. (SI-Score: 72) offers innovative crop protection and seed treatment solutions. These products protect crops from pests, diseases and other hazards (e.g., dust, wind) during planting, while also improving seed performance, which is essential for maximizing yields in a precision farming context.
For more information about the LUKB Smart Farming AMC (ISIN CH1300734782), visit the LUKB website or contact us at info@singularity-group.com.
About The Singularity Group
The Singularity Group (TSG) quantifies applied innovation for investors in listed equities. TSG is the initiator of the Singularity Index™ (Bloomberg ticker: NQ2045), a global, all-sector benchmark and gold standard for applied innovation. The Singularity Strategies include The Singularity Fund (UCITS Lux), Singularity Reshoring(UBS AMC), the Singularity Small&Mid (UBS AMC), and now LUKB Smart Farming (AMC). The Swiss investment advisory boutique works closely with the Singularity Think Tank, a network of entrepreneurs and academics with deep insights into innovation value chains. Their input forms the foundation of TSG’s proprietary innovation scoring system that quantifies the engagement of companies within a set of curated Singularity Sectors worldwide across all market capitalizations and industries. The Singularity Innovation Score (SI-Score; see below) defines how much value listed companies are generating through applied innovation.
The Singularity Innovation Score (SI-Score): A company’s SI-Score represents the percentage of its revenues associated with innovation. It reflects a company’s ability to create innovation- versus commoditized -business and -cash flows, and its ability to participate in technological evolution. Changes in the SI-Score are just as important as the absolute value. A company’s SI-Score relative to its overall GICS sector can say a lot about the competitive standing and ability to gain and maintain market share. Regional SI-Scores can be used to evaluate the innovation power of markets as well as to gauge companies’ standing in different regions.
