12 November 2009 23:21 [Source: ICIS news]
By Joseph Chang and Simon Robinson
NEW YORK (ICIS news)--Size is crucial in innovation as companies must be able to multi-task when they attempt to solve problems, Dow Chemical chief executive Andrew Liveris said on Thursday.
“Size really matters when it comes to innovation,” Liveris said at a press event in ?xml:namespace>
“You need scale and technology to work on multiple fronts to solve the world’s most intractable problems, whether they’re in energy, water, transportation or infrastructure,” he added.
Dow aims to spend $1.6bn/year (€1.1bn) on research and development (R&D), and seeks to begin a “new era of market-driven science-based solutions,” noted the CEO.
Dow’s R&D budget is greater than the estimated $1.4bn combined budget of all the chemistry departments in the
A cultural shift from focusing on assets to focusing on technology is also critical to success for Dow, Liveris said.
“It is easy to miss customer needs if you’re asset-centric. Opportunities can just pass you by.”
Dow also said it has an innovation advantage over start-up venture capital firms.
“We have an unfair competitive advantage,” said Dow chief technology officer Bill Banholzer.
“We have the scale and can spend $100m/year on high-throughput screening tools, and leverage innovations across multiple businesses,” he added.
While about 33% of Dow’s product portfolio comprises new items introduced within the past five years, the more important aspect is the profit margin on those products, said Banholzer.
“The statistic of percentage of new products is not important – innovation and margins are what matter,” he said.
($1 = €0.67)
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