Impacts of digitalization on value creation and capture: Evidence from the agricultural value chain

Abstract

CONTEXTDigitalisation impacts value creation and capture in all industries economic sectors. One of the somewhat less researched and less well-understood contexts is agriculture. OBJECTIVETo describe the impacts of digitalisation on value creation through four dimensions of the value chain – activities, flows, actors and governance – and analyse the implications of these changes for value capture. METHODSWe conducted a case study on the upstream section of a farm's value chain, including the most relevant actors, and complemented it with secondary data from papers and gray literature. RESULTS AND CONCLUSIONSWe found two important impacts: (i) value creation occurs increasingly through platforms operated by big players beyond the industry boundaries, and (ii) value capture by farmers depends on the competitive dynamics among these players, and on policies and regulations. SIGNIFICANCEThe study addresses the four dimensions of the agricultural value chain, allowing a deeper understanding of its digital transformation. The paper also contributes to knowledge about the evolution of the industries involved by discussing the competitive dynamics. These views are relevant to guiding the strategic decisions of suppliers, farmers and policymakers.