The Importance Of Risk Management In Controlled Environment Agriculture

Welcome to our weekly edition! Recently, we were fortunate to be a fly on the wall during a compelling discussion between some of the industry's leading minds: Neda Vaseghi, CEO of Microclimates, and Loren West, CTO of Microclimates. Their thought-provoking dialogue, ranging from the shifting focus on software, data control, cybersecurity, and risk management, has revealed many valuable insights into the current and future of the CEA landscape.

In this article, we'll unpack their enlightening conversation, highlighting the CEA's dualistic mindset, the increasing emphasis on cost-efficient scalability, and the potential for cooperation and community in this emerging field. We'll also explore the challenges and solutions associated with integrating open-source systems, cybersecurity threats, and the quest for a new modular paradigm.

Let's dive in!

Dealing With Different Trends

Vaseghi initiated the discussion by highlighting the dualistic mindset within the CEA landscape, oscillating between a traditional hardware-centric approach and a rapidly emerging software-focused mentality. The CEO emphasized that the challenges of this transition are significant, primarily when an organization starts with a hardware-first approach and then tries to adapt to a software-oriented one. The agility required for software integration can be taxing for companies rooted in hardware.

“Software is relatively easy to adapt to innovations and technologies, but when you started as a hardware-based company, the transition takes more time and resources as the intrinsic characteristic of these companies is a lack of flexibility.” Said Neda Vaseghi, “The result for these companies is that the software integration increases their CAPEX, and it requires a restructuration process.”

However, it's not only the hardware-software shift that CEA faces as it evolves. Vaseghi identified another core challenge: the quest for cost-efficient scalability. As the sector grows and the demand for sustainable food production increases, companies in the CEA space must balance growth with affordability. 

“We’ve had a couple of years of investment frenzy with affordable financing options, but as these options dried up, companies must strive for cost-efficient scalability. Which requires step-by-step growth and reaching milestones before further scaling,” she added.

On a positive note, Vaseghi championed the idea of cooperation over competition in the emerging field. She advocated for a learning community and mutual growth among industry players, underlining the importance of open-source systems in driving innovation and collaborative progress.

Data Control Is Prevalent

Yet, integrating these open-source systems into existing facilities isn't without complications. The concentration of the food supply chain and the reliance on digital tools and software solutions expose CEA to considerable security risks. Furthermore, Vaseghi expressed concerns over data control, especially with the rise of inexpensive technologies that could potentially land vital data in the hands of foreign entities, adding another layer to the security concerns.

“People are unaware of that, but cheaper models collect data controlled by the company or other entities that could be linked to foreign governments. With no possibility of control by the grower,” Said CTO Loren West.

CTO Loren West echoed Vaseghi's thoughts but focused his discourse more on the solutions. He made a case for a new modular paradigm, a model allowing incremental improvements and enhancing agility. With the current climate of fear and uncertainty in the market due to various threats, West argued that it's the perfect time for introspection and incremental transformation.

Data-driven operations technology is another area that West touched on. By leveraging data effectively, organizations can improve their operational efficiencies, opening up new avenues for growth and profitability. He also suggested introducing advanced visualization tools, such as cameras in the facilities, to enhance operations further.

However, the conversation about data and digital solutions constantly loops back to one fundamental concern: cybersecurity. According to West, the industry should brace itself for continuous challenges. Even if the frequency of attacks might stabilize shortly, West does not believe attacks will decrease.

Risk Management Strategies Should Not Be Overlooked 

He suggests that companies should proactively establish dedicated risk management departments as they grow. Additionally, nurturing relationships with software vendors will be vital to managing and mitigating the risks of increased digital dependency. 

“Risk management is often overlooked in the industry, which could have catastrophic effects if we think in terms of potential contamination and not being able to have a clear visual in your operations,” said Neda.

In conclusion, the future of CEA is undoubtedly tied to the digital world. However, this transition isn't devoid of hurdles. As the industry matures, companies like Microclimates and iGrow News will need to stay ahead of the curve, navigating challenges of cost-efficiency, risk management, data security, and digital transformation while leading the revolution in sustainable food production. This thoughtful exchange among industry leaders sets the stage for exciting developments and significant advancements in the world of CEA.