• Digitalisation of the agrifood sector: what does Twitter tell us?

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    Technology is advancing at a frenetic pace and offers the agrifood chain a large number of opportunities to make its production more efficient and sustainable. Moreover, the arrival of COVID-19 has shown that the most digitalised companies were able to continue their activities more readily than the rest. In this article we examine the degree of popularity of the different digital technologies used in the primary sector and agrifood industry based on a text analysis of over 2 million tweets on Twitter. All these technologies are essential to create a connected ecosystem that will make up the Food Chain 4.0 of the future.

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    The unexpected arrival of the pandemic has shown that the most digitalised companies were more prepared to adapt to the new situation and were able to continue to operate much more smoothly than the rest. There is no doubt that, in this new environment, the digital transformation of companies is now unavoidable in order to boost their competitiveness.

    Big data, robotics, the internet of things and blockchain are just some examples of the new digital technologies gradually being adapted by firms, particularly in the agrifood sector. Technology is advancing at a frenetic pace and is offering the agrifood chain a large number of opportunities to produce more efficiently and sustainably. However, statistical information on the degree to which such technologies have been taken up, and the most comprehensive official statistical source1, does not provide information on the primary sector. Below we present a novel analysis of the «popularity»  of new digital technologies in the agrifood sector based on data from Twitter.

    • 1. Survey on the use of information and communication technologies (ICT) and e-commerce in companies, compiled by the National Statistics Institute.
    Twitter as a source of information to detect future trends

    Data from Twitter can be extremely valuable in detecting new trends as it allows us to analyse the popularity of certain terms according to how frequently they appear in tweets. However, it is true that «talking about something» is not the same as successfully implementing the various digital technologies in a company's recurring operations. For this reason the results presented below should be interpreted simply as an indication of new trends that may be taking root in agrifood companies.

    Data from Twitter allow us to analyse how popular the different digital technologies

    are in the agrifood sector according to how often they are mentioned in tweets.

    For this study, data was processed from over 24 million tweets sent by individual users and digital media during the period 2017-2019. Among these, 2 million corresponded to the agrifood sector. Using natural language processing techniques, the tweets were categorised according to mentions of different digital technologies and to the business sector.2 The key to obtaining relevant data from social media is to first define «seed» words or phrases to identify texts corresponding to each of the business sectors, as well as «seed» words or phrases related to the different digital technologies of interest.3 Using a machine-learning algorithm, other words and phrases related to the concept in question that were not initially included were also identified, thus broadening the spectrum of texts analysed. At this stage, it is important to carefully screen for polysemous words (i.e. those that have more than one meaning, such as the word «reserva» in Spanish, which can be used to refer to a hotel booking as well as an aged wine).

    • 2. This analysis was carried out in collaboration with Citibeats, a company specialising in unstructured natural language processing.
    • 3. For example, the «seed» woods and phrases used to identify big data were: analytics, arquitectura de sistemas (system architecture), data mining, database, inteligencia empresarial (business intelligence), Python and SQL, among others (as well as the term big data per se).
    What is the degree of digitalisation of the agrifood sector according to Twitter?

    To assess the agrifood sector's degree of digitalisation according to data from Twitter, we first need to know how common tweets about digitalisation are in other business sectors. The most digitalised industry according to our analysis is the information and communication technologies (ICT) sector: 3.2% of the sector's tweets contain terms related to digitalisation, a result that is not surprising given the very nature of the industry. Next comes finance and insurance with 2.7% of the tweets.

    This percentage is obviously lower in the primary sector at 0.6% but it is similar to the 0.7% for professional, scientific and technical activities. In the case of the agrifood industry, the percentage of tweets on digitalisation is only 0.3%, very close to the basic manufacturing sector (which includes the textile, wood, paper and graphic arts industries), with the lowest percentage among the sectors analysed, 0.2%.

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    Which digital technologies are most popular in the agrifood sector according to Twitter?

    The wealth of data obtained from Twitter allow us to identify the most popular digital tools in each business sector according to how frequently they are mentioned in the tweets examined. According to our analysis, a large proportion of the primary sector's tweets about digitalisation tend to include issues related to big data (45% of all tweets about digitalisation). One clear example of the application of big data in the sector can be found in «precision agriculture» techniques which require large amounts of data to be analysed to optimise decisions and thereby increase production and, in turn, ensure sustainability. These techniques are used, for instance, to calculate the irrigation requirements of crops by taking into account climatic conditions (sunlight, wind, temperature and relative humidity) and crop characteristics (species, state of development, planting density, etc.). To carry out this calculation, real-time updated meteorological data, a large computing capacity and fast data transmission speeds are all required for an automatic irrigation system to be properly adjusted. This technology helps to use water more efficiently, a highly relevant aspect in areas with a Mediterranean climate that are extremely vulnerable to climate change and where water is in short supply.

    Big data, the internet of things and robotics are the most popular technologies in the primary sector,

    indispensable for advancing the application of precision agriculture techniques and smart automated farming.

    Other popular technologies in the primary sector are the internet of things (16% of tweets) and robotics, including drones (10% of tweets). The new digital technologies promise to revolutionise the field of agriculture and stockbreeding by the middle of this century, the same as the mechanisation of farming in the xxi century. Agricultural Machinery 4.0 (which is closer to the robots in science fiction films than to the tractors we are used to seeing on all farms in the country) helps to increase productivity whilst also improving working conditions in the field. This trend towards more automated agricultural tasks has become stronger in the wake of the coronavirus pandemic, as the difficulty in recruiting seasonal workers due to international mobility restrictions has led to increased interest in robotics and agricultural automation. In fact, companies that manufacture robots for agriculture have seen a sharp increase in orders, such as robots that pick strawberries while removing mould with ultraviolet light.14 

    The use of drones warrants particular attention as this has grown exponentially in recent years and applications are increasingly widespread: from the early detection of pests and the aerial inspection of large areas of crops to locating wild boar with heat-sensitive cameras to prevent the spread of African swine fever to domestic pigs.5

    • 4. See Financial Times Agritech «Farm robots given Covid-19 boost», 30 August 2020.
    • 5. See http://www.catedragrobank.udl.cat/es/actualidad/drones-contra-jabalies

    The popularity of various digital technologies in the agrifood sector

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    Blockchain is the technology that stands out most in the food sector (30% of the total number of tweets on the sector's digitalisation) and this comes as no surprise as it has many different applications for the food and beverage industry. Producing a chain of unalterable, reliable records, blockchain makes it possible to guarantee the complete traceability of products throughout all the links in the food chain. Simply scanning a QR code provides access to all the data regarding the origin, production method, veterinary treatments received, ingredients used, etc. A large number of agrifood companies are already experimenting with blockchain as it offers clear benefits in terms of transparency regarding origin, product quality and food safety, aspects that are increasingly valued by consumers. Blockchain technology is also being used to limit food waste, another essential challenge for the sector.

    Blockchain enables the digital verification of food products,

    making them traceable throughout the links in the food chain.

    Compared with other sectors, which tools are particularly significant for the agrifood industry?

    There are some digital technologies that are not very popular across all economic sectors, perhaps because they have a more limited or specific range of application. These are technologies that, despite having a low percentage of tweets in absolute terms according to our study, may be relatively popular for a particular sector compared with the rest.

    To detect such cases, we have calculated a new metric, namely a concentration index which takes into account the relative popularity of technologies in a sector compared with the rest of the sectors.6 By using this methodology, we have found that the primary sector continues to stand out in terms of big data. Specifically, the primary sector concentrates 9.2% of the total number of tweets mentioning big data made by all sectors, a much larger proportion than the 3.1% share of primary sector tweets out of the total number of tweets analysed (as can be seen in the following table, in this case the concentration index is 3). We have also determined that the sector is particularly interested in the internet of things, as already mentioned, but have discovered that nanotechnology is also a relatively popular technology in the primary sector. In other words, although only 3.8% of the tweets in the primary sector deal with nanotechnology, this percentage is high compared with the 1.7% share of nanotechnology tweets out of the total (in other words, this technology is not very popular in general across all sectors but is slightly more popular in the primary sector than the others). This find is not surprising since genetic engineering is one of the fields in which technology has advanced most in order to boost crop yields. For example, by optimising the yield of vines it is possible to develop plants that are much more resistant to extreme weather conditions and pests.

    • 6. The concentration index is calculated as the ratio between (1) the percentage of tweets related to a particular technology and sector out of the total tweets for this technology, and (2) the percentage of tweets by a sector out of the total tweets of all sectors. Values above 1 indicate the technology is relatively more popular in that sector.

    Concentration index for tweets related to each technology in comparison with the other sectors

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    Finally, virtual and augmented reality is also a relatively popular technology in
    the agrifood industry.
    Specifically, the agrifood industry concentrates 6.2% of the total virtual and augmented reality tweets made by all sectors, a percentage that more than doubles the 2.5% share of primary sector tweets out of the total number of tweets analysed (the concentration index is equal to 2.5 in this case). This technology uses virtual environments (virtual reality) or incorporates virtual elements into reality (augmented reality) that provide additional knowledge and data that can be used to optimise processes. At first it may be surprising that this technology is relatively popular in the agrifood industry but its uses are spreading as the industry implements digital technologies in its production processes, in the so-called Industry 4.0. One specific example of how this technology is used is in repairing breakdowns. When a fault occurs, operators can use augmented reality goggles to follow the steps contained in virtual instruction manuals that are projected onto the lens to help resolve the incident. The glasses recognise the different parts of the machine and visually indicate to operators where they should act to solve the specific problem.

    There are numerous examples of new digital technologies being applied in the agrifood sector. We are witnessing a revolution that is destined to transform the different links in the food chain: from the exploitation of data and the use of drones to make harvesting more efficient to implementing blockchain technology to improve the traceability of the final products that reach our homes. In short, the future will bring us the Food Chain 4.0, a totally connected ecosystem from the field to the table.

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The challenges facing the State in the new digital economy

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The adoption of new digital technologies has represented a revolution for both firms and individuals, changing the way in which they are organised, how they relate to each other and also how they shop. Nevertheless such changes also entail significant challenges for the State as it has to regulate activities that previously did not exist or for which the current legislation is not appropriate. In this article we will analyse the role played by the State in terms of competition, tax revenue and global governance in a digitalised world.

Starting with competition, it is important to note that new digital technologies can reduce competition or even encourage monopolies. Traditionally, when a firm (technological or otherwise) achieves considerable market share and has a leading standard platform it may be tempted to abuse its dominant position by restricting competition. Technological advances in the digital era have helped several technology giants (Microsoft, Google, Apple, etc.) to take up such an advantageous situation. However, new digital technologies also open the door to competition as they allow new rivals to appear on the scene by simplifying the process required to become a provider of goods and services. For example, new apps for mobiles have made peer-to-peer or P2P transactions easier in regulated sectors such as rented accommodation and passenger transport, which have experienced a boom in the last few years.

This increased supply as a consequence of better technology has a positive side for consumers as it increases existing competition thanks to the greater number and variety of goods and services offered and can also reduce the price. However, the disruptive appearance of new agents can also lead to unfair competition regarding existing service providers which, unlike the new kids on the block, have had to respect the rules regarding security, safety and quality standards or obtain licences to operate, among other issues. Technological innovation makes it possible for new agents to do business and it is impossible (and surely not at all desirable) to restrict this completely. But they should have to comply with some basic requirements, both at the start of the business (for example, following consumer protection requirements) and while carrying out the activity (for example, paying tax), and they should also operate legally. Legislation also needs to adapt to the new business model and technological improvements. For example, the need to pass a test proving a thorough knowledge of the streets in a city to obtain a passenger transport licence may no longer be appropriate, now that there are mobile phones with GPS and anyone can take people to a precise address without having to memorise all the different routes (as well as facilitating contact with clients via a P2P app). In short, the State needs to develop a more flexible, broader regulatory framework that responds to this new situation but does not make it unnecessarily difficult for new agents to enter the market.

Another important issue is consumer protection legislation and quality and safety standards, whose compliance must be guaranteed by the State, a complicated task in a digital economy which, by its very nature, has no borders. Legislative harmonisation between the different countries in the European Union (EU) and also within them would be an improvement in this respect as it would increase consumer protection at the same time as boosting the digital economy. In Spain, for example, there are different regulations related to tourist apartments depending on the autonomous community and even the municipality, making it difficult to control this activity and also to develop it.

In the fiscal area, the challenge facing the State is how to tax online business. Some large technological firms have managed to reduce their tax bill by placing their sales in countries with lower taxes instead of the country where the buyer is actually making the transaction. Similarly, in order to avoid paying tax in countries with higher rates, they transfer part of their profits to subsidiaries in countries with lower rates. To do so they use transfer pricing arrangements that shift most of the profits to another domicile. The European Commission is analysing the possible distortion of competition of various tax breaks granted by, among others, Ireland (in the case of Apple) and Luxembourg (in the case of Amazon). Harmonised legislation, at least between EU countries, would reduce this problem, as well as the effective supervision of transfers between subsidiaries to ensure they comply with the law. On the other hand, at present tax cannot be levied on part of the income obtained for providing goods and services via digital media as actual legislation is not adapted. For example, drivers using passenger transport apps, which have yet to be legalised, do not pay VAT on their transactions. However, P2P apps could help to improve tax payment since they increase the traceability of transactions, making it difficult for commercial exchanges to remain off the record.

Lastly, the third area of utmost importance for the State is the global governance of digital flows. We shall use the internet as a case in point as this helps to make a debate that is sometimes too generic a little more concrete, as well as the fact that it is the medium through which a large part of digitalised globalisation is occurring. The internet owes its success to being a single, global system, in particular its main protocols and infrastructures. But today there are two points of friction that could erode these principles: net neutrality and cybersecurity.

Net neutrality means that all data must be treated equally, without discrimination due to origin or content; consequently the internet is sometimes seen as a single service instead of a network with different categories. In practice this means, for instance, prohibiting the firm that owns the infrastructure to charge for some data to be transmitted more quickly. However, it also reduces companies' incentives to innovate and invest as they lose a way of getting a return on their investment. Individual users want to access all information without filters but they also want improvements and innovation in the infrastructures they use, at the lowest cost possible.

Lastly, cybersecurity is a critical issue for governments: the size of cybercrime is now comparable in volume with drug trafficking.1 It is not easy to balance internet security (which should be desirable for all parties) with internet control to ensure national and international security. For some governments the internet might represent a political risk or they may want to use it as a means of controlling their citizens. In any case using the internet to achieve national political goals damages its integrity and functionality. One relatively optimal solution from a theoretical point of view would be to create a neutral zone where the internet backbone were «governed» by a multilateral body incorporating all parties (governments, companies, consumers, etc.). However, it seems difficult to put this idea into practice due to the differing economic interests and the political disparity of the agents involved.

In conclusion, although technological innovations represent an important step forward for society they are also a source of crucial challenges for States. It is important for them to be regulated appropriately to increase the well-being ot the population by taking their preferences into account. But it would be a mistake if excessive or obsolete regulation restricted the resulting possibilities for growth.

Josep Mestres Domènech

Macroeconomics Unit, Strategic Planning and Research Department, CaixaBank

1. Javier Solana, «Cyber War and Peace», Project Syndicate, 30 April 2015.

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