From Scarcity to Solutions 2025

A fragmented innovation ecosystem of disjointed regulations, scarce long-term funding and volatile start- up pipelines creates a critical barrier to scaling- up green solutions.Meanwhile, companies struggle to source and integrate innovations due to disconnected R&D hubs, corporate procurement channels and farmer networks. Start-ups face a double bind: inconsistent R&D funding stifles prototyping, while market access barriers (e.g. corporates prioritizing proven vendors) limit commercialization pathways. This fragmentation forces companies to navigate a labyrinth of siloed partnerships, inflated costs and risks for technologies requiring cross-sector alignment – from precision irrigation to food and water circularity. Furthermore, technological innovation often goes together with business model innovation — the two are mutually reinforcing. For instance, the combination of soil improvement, smart irrigation and precision farming forms the foundation of regenerative agricultural practices. While companies such as Nestlé have developed comprehensive regenerative agriculture frameworks across emerging markets, the fragmented innovation ecosystem slows adoption. Infrastructure deficits Even promising technologies falter without infrastructure support. For example, smart irrigation adoption in arid Middle Eastern regions is hindered by unstable electricity grids; while China’s last- mile, small infield irrigation systems, developed in the 1970s, require an upgrade as they cause inefficiency and water wastage. Such gaps reflect underinvestment in cross-sector infrastructure (e.g. renewable energy grids, digital connectivity) that underpins tech scalability. In addition, digital infrastructure and data availability remain limited. Fragmented, inconsistent and siloed data – particularly on soil health, input use or emissions – hinders evidence-based decision- making and technology deployment. Economic misalignment Modular technologies, such as bio-engineered soil or solar-powered desalination, require upfront investments that smallholders and SMEs cannot shoulder alone. Farmers lack incentives to reduce chemical usage or adopt water-saving technologies (e.g. drip irrigation), due to low water prices, the high cost of innovation and a lack of sanctions or incentive schemes. Skills shortages The transition to advanced systems requires technical expertise that is often lacking not only among farmers but across the entire food value chain. From operating internet of things (IoT)- enabled irrigation systems to managing data-driven logistics and sustainable processing technologies, many actors – including producers, processors and distributors – face significant skills gaps that hinder effective adoption and scaling-up. The following case studies highlight that addressing the food-water nexus requires more than technology alone. Scaling-up depends on collaborative ecosystems that align value chain incentives, support early-stage innovation and adapt solutions to local agricultural and water contexts. With integrated policy frameworks, blended finance and cross-sector partnerships, emerging economies can move from isolated pilots to scalable, resilient food-water systems. Water stewardship has to move from compliance to competitive advantage. What we’ve built in China is more than a set of efficiency measures – it’s a new way of thinking about value creation in food systems. By aligning with national priorities, co-investing in infrastructure and partnering with farmers through shared models, we’ve embedded water efficiency into the business model itself. The result is a more resilient supply chain, stronger farmer networks and a scalable blueprint for food-water innovation in high-risk regions. Anne Tse, Chief Executive Officer, Asia-Pacific, PepsiCo Farmers lack incentives to reduce chemical usage or adopt water-saving technologies, due to low water prices, the high cost of innovation and a lack of sanctions or incentive schemes. From Scarcity to Solutions: Food-Water Innovation in Asia and the Middle East 17