Chemical companies that are committed to changing many established innovation practices and norms to most skillfully handle innovation challenges can be in a favorable position to make full use of the upcoming opportunities.
Over the years, the chemical industry has continuously introduced innovative and unparalleled products, such as polystyrene and light-emitting diodes, which are around us every day. However, in recent years, only a few chemical companies have been at the forefront of breakthrough innovation, while many others have had mixed results. In 1950-60, new materials and new chemical substances were discovered most frequently, with 9 major chemical discoveries, and 13 major chemical discoveries in 2000-2019. The pace of innovation in new molecules and materials has also slowed down. Apart from innovative crop protection chemicals, the chemical industry has not developed any blockbuster products in the past decade.
However, that seems to be changing rapidly. Advances in digital technologies such as 3D printing are creating new opportunities and driving materials companies to launch innovative products - for example, new polymers with structural stability that can replace metal plates and prosthetics for complex bone surgery. Further, advanced data analysis and biochemical analysis pave the way for many small companies to enter the chemical industry (107 new companies with annual revenue of less than $3 billion entered the industry in the past decade), with the help of new application development and reduced time to market.
Our analysis also shows that although R & D spending in the industry has been relatively stable in recent years, companies report that the value of their patented products and technologies has more than doubled in the past 15 years. In addition, in the past 10 years, the number of mentioning innovation related keywords in 10-K reports of chemical companies has generally increased. Although innovation at the molecular level has become less intense, the company is still creating significant value in application development, and the existing molecules and processes are being modified to achieve better performance. Obviously, the efficiency and productivity of R & D have improved over the years.
Nevertheless, chemical companies can consider changing their way of innovation to successfully cope with the current unique destruction. Even in the economic downturn aggravated by the outbreak of cowid-19, chemical companies are also facing a long-term interruption. For example, companies outside the industry are entering the competition to compete with existing industry leaders; end market demand is changing due to changes in consumer preferences and policies / regulations; the industry is being affected by other aspects of decarbonization and energy transformation, which has changed raw material prices and material demand. In this environment, chemical companies should focus on adjusting their innovation strategies and efforts when planning for the future.