1660238364477 Ottewell2

World Economic Forum Urges Innovation

June 15, 2016
Report focuses on challenges of advanced materials systems R&D

Chemical companies must rise to a number of crucial challenges to benefit fully from the growth in advanced materials systems (AMS), according to a report published in June by the World Economic Forum, Geneva, Switzerland.

The report, “Shaping the Future of Collaborative Innovation in Chemicals and Materials,” (available at https://goo.gl/GeUwVD) looks at how chemical companies can overcome obstacles to further innovation in AMS. To achieve this, it says companies must first find answers to key questions, including:

• With extreme pressure for more efficient, cost-competitive solutions, and greater use of natural resources, how can companies use their feedstocks more intelligently, using less (or new, renewable feedstocks) to achieve more?
• Collaborative innovation shortens timelines and reduces costs, but can add complexity if expectations are not well aligned. How can companies identify and manage the right partners in industry, government and academia to play meaningful roles in advanced materials innovation?
• As customer product lifecycles are shortening, can cycle times for product development shorten to keep pace with this trend?
• Selling an advanced material as an ingredient is a less powerful business model than selling materials as part of systems, so how are value chains analyzed to optimize value capture?
• The future of advanced materials depends on the ability to attract talented newcomers; so how can companies capture young people who might otherwise land in other sectors?

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“To succeed in these areas, the industry will have to understand and address the needs of the marketplace. This can likely be achieved through the concept of ‘seeds and needs.’ While ‘needs’ in the marketplace will require innovative ideas, new disruptions produced by the industry can also serve as ‘seeds’ for broader changes to society. They, in turn, create brand new needs. Both of these approaches will likely require a deep connection to the marketplace to understand and anticipate needs and to share the disruptive potential of new innovations,” notes Thomas M. Connelly, Jr., executive director and CEO, American Chemical Society (ACS), Washington, D.C., in his forward to the 32-page report.

Based on inputs from companies including Clariant, Solvay, Evonik, Sabic, Henkel, Air Liquide, DSM and Mitsubishi, the report features a number of recommendations to create new approaches to innovation.

The first addresses the move from a largely linear R&D model to a more complex platform in which end-user needs are paramount. Hence, notes the report, there is a need to create well-functioning innovation platforms that integrate new, outside stakeholders into the process so customers, suppliers, regulators and other stakeholders have formal channels to influence the innovation cycle.

Second is addressing the long cycle times for materials R&D. Here, a combination of risk and fragmented value chains unnecessarily increase time to market for AMS. The report recommends integrating end-user needs into development and innovation processes at an early stage to help ensure development efforts are solving a business issue before significant resources are invested into a project, it says.

Next, the move towards sustainable feedstocks and products will impact industry profitability, while feedstock price volatility can compromise commitments to joint efforts and inhibit collaborative innovation. Here, manufacturers should engage directly with end users to increase awareness of the benefits of sustainable materials. “This will be particularly relevant …, as consumers may be willing to pay an eco-premium for sustainable materials that are part of a complex value chain if they understand the environmental benefits,” notes the report.

The fourth point focuses on new sources of innovation. New business models are causing companies with broader portfolios to split into more specialized units focused on either specialty or commodity chemicals. An evolution is taking place as companies tap into new sources of innovation, such as startups and academia, to supplement their corporate innovation portfolios: “Strategic partnerships are becoming increasingly important for the industry as the separations of specialty and commodity chemicals businesses reduce the availability of internal resources.”

Finally, there is a call for an extensive inventory of existing materials. Access to internal and external materials databases will provide a competitive advantage. Here, companies are urged to use materials databases to enhance or implement their own AMS. Suggestions to do this include leveraging advanced digital tools that empower firms to analyze their existing materials databases, and participating in the $25-million multi-stakeholder National Institute of Science and Technology center of excellence, which fosters collaborative innovation. (For more on collaborations, see “Umbrella Groups Reign.”)

Seán Ottewell is Chemical Processing's Editor at Large. You can email him at [email protected].

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