Agricultural strength is not enough to create a thriving agtech sector, according to new research from the University of Nebraska-Lincoln, which found that the regions attracting the most innovation investment are those that have deliberately built start-up, funding and commercialization infrastructure around their farming industries.
The report, Nebraska and the Midwest Agtech Ecosystem: Benchmarking Innovation Investment and Translation Gaps, analysed $736m of agtech venture capital investment across eight Midwest states between 2021 and 2025. While agricultural output was found to be an important predictor of investment, it explained only 56.8% of the variation in funding levels across the region. The remainder was attributed to ecosystem factors such as access to capital, start-up formation, institutional coordination and commercialization capacity.
Nebraska’s $45m innovation translation gap
Using a series of new benchmarking metrics, the researchers found that Nebraska, despite being one of the Midwest’s largest agricultural economies, attracted only 63% of the agtech investment its agricultural base would predict. The state raised $76m in agtech funding over the period, compared with an expected $121.1m, leaving what the authors describe as a $45.1m “innovation translation gap”.
Why some states outperform agricultural benchmarks
The study argues that Nebraska’s shortfall is not due to a lack of agricultural assets. The state benefits from globally significant cattle and beef production, extensive irrigation infrastructure, strong university research capabilities and a growing start-up base. Instead, researchers point to weaknesses in growth-stage financing, start-up formation, commercialization pathways and ecosystem coordination.
Building the infrastructure for agtech growth
By contrast, states such as Missouri and North Dakota significantly outperformed their agricultural benchmarks. Missouri benefited from strong bioscience infrastructure and corporate anchors such as Bayer, while North Dakota has invested heavily in initiatives including Grand Farm and the NSF agtech Engine.
Farm strength does not guarantee innovation success
The authors conclude that the gap can be closed, but only through targeted action. Their recommendations include establishing patient capital vehicles for agtech start-ups, building innovation hubs around regional strengths such as irrigation and bioeconomy technologies, increasing start-up formation through venture studios and accelerator programmes, and creating stronger coordination between universities, investors, corporates and farmers.
Ultimately, the report’s central message extends beyond Nebraska.
“Successful agtech ecosystems are built, not inherited,” the study suggests. Agricultural leadership may create the foundation for innovation, but regions that translate farm-sector strength into start-up growth and commercial success are those that deliberately connect research, entrepreneurs, investors and industry into a functioning innovation system.
