Within the ASEAN Economic Community, “The Strategic Plan of ASEAN Cooperation in Food, Agriculture and Forestry is integrated to respond to the socio-economic and demographic changes driven by rapid economic growth, regional integration, and globalization” (ASEAN, 2024). Agriculture remains a fundamental component of the ASEAN economy, supporting rural livelihoods, food security, and economic growth. The region’s geographic diversity and abundant natural resources create favorable conditions for agricultural development (ASEAN Investment, 2025). As a significant contributor to global agricultural production, ASEAN plays a crucial role in ensuring global food supply amidst a rapidly growing world population. Expanding agricultural productivity is essential to address future food security and nutrition challenges. However, the sector faces increasing pressures from resource restrictions, climate change, evolving market demands, and other production challenges (Asian Development Bank, 2021). These challenges have sparked renewed attention on technological innovation as a strategy to modernize agricultural systems, improve resilience, and enhance productivity.

Technological innovation (TI) can be demarcated as the development, adoption, and application of new or significantly improved technologies, such as machinery, equipment, systems, and practices, that advance agricultural transformation in terms of productivity, efficiency, and sustainability. In line with the Industry 5.0 paradigm, which promotes human-centered, sustainable, and resilient development, agricultural innovation integrates smart technologies with socio-environmental priorities. Innovations such as precision agriculture, genetically modified organisms (GMOs), automated machinery, drone technology, and sensor-based farming systems are revolutionizing the sector (Brookes, 2022). These technologies not only improve productivity and efficiency but also help address resource depletion, climate change, and labor shortages. For example, precision farming, driven by sensors and data analytics, promotes efficient water use, optimized fertilizer application, and improved pest and disease management. Beyond direct productivity improvements, technological innovation can enhance the overall resilience of agricultural systems. Developing drought-resistant crops may reduce vulnerability to climate change, while innovations in irrigation and water-saving technologies can mitigate water scarcity issues. These innovations are increasingly critical to agricultural performance in ensuring food security, particularly in the ASEAN region, which holds high agricultural potential.

In recent years, digitalization, including big data, artificial intelligence (AI), cloud computing, information and communication technology (ICT) tools, and the Internet of Things (IoT), has improved speedily. These tools have been integrated into daily activities and business operations, improving efficiency, coordination, and responsiveness. Digitalization facilitates the dissemination and adoption of technological innovations throughout the agricultural value chain. For instance, it provides contemporaneous data on meteorological trends, climate change, pest outbreaks, and market conditions, all of which are crucial for agricultural production (Pandey and Pandey, 2023). Mobile-based applications and services also offer agricultural extension services, crop management guidance, plant protection advice, credit, and insurance services, promoting technology adoption and risk reduction (Choruma et al., 2024). Digital platforms further improve coordination across the value chain by reducing transaction costs and increasing market access (Fielke et al., 2020). Moreover, the advent of e-commerce, blockchain technology, and metaverse-based virtual marketplaces is transforming the agriculture landscape by enabling traceability, transparency, and immersive stakeholder engagement, which are central to the Agriculture 4.0 paradigm and technology-enabled food supply chains (Corallo et al., 2024, Latino et al., 2024). Hence, digitalization is reshaping agricultural diversity, business models, and institutional structures, creating new opportunities to optimize agricultural practices.

Despite these advancements, adoption rates of technological innovation in agriculture remain low in many countries. High initial costs, inadequate financing, and limited infrastructure are barriers to adoption (Abate et al., 2023). While mobile phone usage has increased recently, accessibility to high-speed internet and modern digital tools remains uneven, especially in rural areas (Abate et al., 2023). Furthermore, limited education, poor digital skills, and inadequate institutional support hinder the effective utilization of technology (Guri-Rosenblit, 2018). These challenges are particularly prominent in the fragmented agricultural systems of the ASEAN region, where many farmers encounter infrastructural, educational, and market access limitations. The adoption of agricultural innovations is fundamentally contingent on the digital divide. Access to digital infrastructure, internet connectivity, and digital literacy determines how effectively farmers can adopt and benefit from innovations. Therefore, understanding how technological advancement drives the agriculture sector is vital for feeding, sheltering, and employing a growing population. Accordingly, this study aims to explore the impact of technological innovation on agricultural performance and the moderating role of digitalization in the ASEAN region.

The study contributes to the literature in five aspects. First, it offers a detailed analysis of how technological innovation affects agricultural performance. While prior studies have observed the influence of technological innovation on manufacturing, economic growth, and the environment, its impact on agricultural performance remains underexplored. Second, the study constructs a technological innovation index for the ASEAN region from 2000 to 2022 to cover the effects of TI on the agriculture sector. Third, it introduces digitalization as a moderating role in the link between TI and agricultural performance, whereas previous studies have predominantly focused on ICT and basic digital tools (i.e., internet, telephone). Fourth, the study evaluates the mechanism linking TI and agricultural performance by incorporating agricultural R&D intensity and labor productivity growth as mediating factors. Lastly, it conducts a detailed analysis of how the interaction between TI and digitalization affects various agricultural sub-sectors, including crop, livestock, fisheries, agri-value-added, and agri-export. Through these contributions, this study offers valuable insights into how technological innovation drives agricultural performance in the ASEAN region.

The remainder of the paper is as follows: Section 2 reviews the literature and generates the hypotheses. Section 3 describes the data, methodology, and variables used. Section 4 presents the empirical results. Section 5 provides the discussions, policy implications, and limitations. Section 6 concludes the study.

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