Impact of
Research & Innovation on Profitable Growth in Chemicals GPCA Research & Innovation Summit
Dubai, March 12, 2014
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Skeptics say the "good old times for innovation are over"
1900
19201940
1960
1980
2000
"There is an overwhelming
consensus among analysts that chemical companies should not spend more on R&D"
European Chemical News
"Innovation will not be a
primary growth and value driver in chemicals"
UBS Equity Research
"Lack of innovation has been one of the industry's greatest
problems over the past decade"
Goldman Sachs "Rapid product innovation may not confer a competitive advantage"
ING
Decline of monomer innovation
Enthusiasts see a different picture
New products/ technologies
Industrial enzymes
Liquid crystals Agchem/GMO seeds Cultures
Alternative feedstock
Methanol to olefins Coal to olefins Biomass to chemicals, e.g., bioethanol to ethylene
Resource-efficient processes New catalysts
New processes, e.g., HPPO, fermentation, electrolysis Better and better solutions
Oilfield chemicals Films and coatings
for electronics, etc.
... and
many more
Top-down perspective Archetypes of successful
companies in chemicals –
Does Research & Innovation
play a role?
Bottom-up perspective Value creation through
innovation –
What does McKinsey’s
Innomatics TM database say?
Top-down perspective Archetypes of successful
companies in chemicals –
Does Research & Innovation
play a role?
Bottom-up perspective Value creation through
innovation –
What does McKinsey’s
Innomatics TM database say?
30
20
10
100
40
90
50
80
70
60
Chemicals egment size, indexed
Global, 2011, USD bn
Adhesives Various
Enzymes Cultures Coatings Catalysts
▪
Broad application of a technology capability/
platform (across various applicat-ions, at scale)
5-15%
▪Customer intimacy ▪
Process chain insights and “system” capabilities
▪New processes/ process
improvements ▪New applications ▪
BUT –feedstock access and conduct often more relevant
5-15%
<5%
Nutritional Products
Beyond stories and opinions…
Top-down perspective Archetypes of successful
companies in chemicals –
Does Research & Innovation
play a role?
Bottom-up perspective Value creation through
innovation –
What does McKinsey’s
Innomatics TM database say?
Innovation benchmarking –McKinsey's Innomatics™
Examples (all or selected businesses)
Industry benchmarking with > 20 companies and > 100 businesses
▪Return on innovation
▪Innovation best practices
In summary
Research & Innovation do contribute to
growth and value creation of the industry –
however, not necessarily for each company
There are very attractive “winning
positions” that rely heavily on the ability
to innovate at scale
Key observations/success factors for
innovation
▪Strategy –reflecting innovation
headroom/tailwind and own capabilities
▪Scale (and/or patience to build) –
critical mass and focus
▪Lab efficiency (and spirit) –work flows,
automation/IT, etc.。