Organizing for value creation : a corporate perspective on urban farming

Abstract: In the year 1800, about 5 % of the world population lived in cities (World Wide Fund for Nature, 2012, 3). Today that number is about 70 % in Europe and North America, and in 2050 it is expected to be 86 % in the developed world and 67 % in the developing world (www, UN, 2009). In addition, the global population is expected to increase with 2.2 billion people until 2050. As a result of the population increase more food has to be produced which requires more transport from the countryside to the cities. However, this flow of resources faces some difficulties. There are various issues in the current agricultural production system that gives rise to environmental problems. Moreover, climate change will put stress on food production as a whole and the increasing price of fossil fuels might also hamper the current global supply system for food. These challenges points to a need to investigate options for alternative agricultural production and market systems to supplement the existing systems. There is a call for new sustainable solutions for city development and urban food supply. Urban farming is traditionally used to improve food security but has recently been acknowledged for its inherent sustainability features. Thus, it has recently gained status as a strategic tool for sustainable city development. The focus of this study concerns urban farming from a corporate perspective with the aim to describe factors that enable value creation. The associated research questions deals with values created and how they are created and perceived. They are addressed by a literature review and a case study where the unit of analysis is an urban farming corporation that uses green houses for their production. The research was conducted with a qualitative approach where document analysis and interviews were the main methods for primary data collection. The theoretical conceptual framework is based on stakeholder theory, theory of the triple bottom line and hybrid organisation theory. The main conclusions are that urban farming can generate economical, environmental and social values simultaneously and that value creation is facilitated by multiple factors. Enabling factors identified are beneficial resource availability and active stakeholder dialogues. Cultivation in green houses allows for minimal use of pesticides and fertilizers and can also upscale benefits of urban farming. When it comes to how values are created, a number of organizational aspects are essential. First, economic value creation is a corporate pre-requisite for environmental and social value creation. Further, a company must have clear social and environmental targets truly integrated to their core activities in order to succeed. This study shows that the hybrid business model allows for this in a beneficial way. Identified key success factors for corporate urban farming are access to patient capital and well developed networks.