Role of Smart Farm as a Tool for Sustainable Economic Growth of Korean Agriculture: Using Input–Output Analysis

Abstract

This study focused on smart farms in Korea to confirm that the fourth industrial revolution technology is a tool that can be used for sustainable economic development in agriculture. This study used the input–output table, which included the production-inducing effects of the demand inducement model, value-added inducing effects, supply shortage effects of the supply inducement model, and the interlinkage effect. These methods were used to compare the impact of smart farm machinery on agriculture and the impact of smart farms on the Korean economy compared to conventional agriculture, thereby confirming the extent of the effect of fourth industrial revolution technology on agriculture. This study was conducted to determine whether this agricultural sector could lead to sustainable economic development. The analysis revealed that the production-inducing effects of smart farms showed a greater ripple effect than those of the agricultural sector. However, both value-added inducing effects and supply shortage effects showed a larger ripple effect in the agricultural sector. Considering only the indirect effect, the smart farms were found to evenly affect secondary and tertiary industries. In the case of value-added inducing and supply shortage effects, agriculture was found to have a greater impact on the secondary industry, whereas smart agri-machines and farms had a greater impact on the tertiary industry. Moreover, according to the interlinkage effect, agriculture was classified as a raw industry with final demand, and smart farms as a manufacturing industry with intermediate demand. These results have several implications. For the fourth industrial revolution technology to lead sustainable economic growth in agriculture, continuous creation of new value by developing various types of business models linked to other industries in consideration of the industrial characteristics of smart farms and agri-machines is necessary. In addition, to fully demonstrate the economic effects of smart farms, continuous management and support are required so that smart technologies can be strategically utilized in the agricultural sector.