Sustainable Business Model Innovation in Vertical Farming Startups : Case Studies of Southeast Asian Vertical Farming Startups

Abstract: Rapid growing population, urbanization, climate change, decreasing agricultural production, and soil degradation causes massive challenges for food production and supply chain in Southeast Asia, especially in urban areas. A sustainable food production and supply chain system is needed to produce and supply food for Southeast Asia urban areas. One potential solution to those challenges is introducing vertical farming. Vertical farming can produce high-quality crops locally and sustainably by reducing water and land use, decreasing pesticide use, reducing carbon footprint, and growing plants in any climate. This research aims to identify the current status of vertical farming startups in Southeast Asia, investigate the existing challenges and available opportunities in the Southeast Asia vertical farming industry, and analyze the sustainability practices and sustainable business model innovation implemented by Southeast Asia vertical farming startups. A literature review of vertical farming business typology, business model innovation, and sustainable business model innovation is used to create theoretical frameworks in this research. This research is an exploratory multiple case studies research with a qualitative method. The data in this research is collected through interviews with founders and managers from 10 vertical farming startups in Southeast Asia. The interview data is analyzed using vertical farming business typology, business model framework, and sustainable business model innovation archetypes. The research outcomes indicate that the vertical farming industry in Southeast Asia is an early growing industry, and Southeast Asia vertical farming startups are considered as early growing startups with small capital and small teams. Despite existing financial, operational, and market challenges, Southeast Asia vertical farming startups have considerable opportunities to grow with their effort to develop their vertical farming business into a more sustainable business by conducting various sustainability practices and adopting sustainable business model innovation.