THERE'S NO question that innovation is the key driving force for the chemical industry and its customers - and particularly in times of crisis.
While there's always the need to cut costs in a downturn, slashing research and development is truly detrimental to a company's long-term future and success.
"Innovation, especially in the midst of crisis, is of utmost importance. By cutting for even one year, you can create severe damage which is incomparable to the short-term benefit from savings," said Dr. Werner Breuers, the head of R&D at German specialty chemicals firm LANXESS, in an interview in New York.
Plus, during times of crisis, it is typically the new and innovative products that are the least impacted. "It is much easier to differentiate new and innovative products in a crisis. In the one-and-a-half years since the crisis began, these have been much less impacted," Dr. Breuers said.
Everyone talks a good innovation game, but you have to walk the walk. In 2009, even while LANXESS cut costs significantly, it actually raised R&D spending by 10% to around €110m and plans to boost that figure by another 10% in 2010.
US-based Dow Chemical also took great pride in maintaining record levels of R&D spending of about $1.6bn in 2009, even while cutting capital expenditures by 50%.
Spending money does not guarantee success. There are plenty of other factors at play, including collaborating with customers and universities, as well as fostering a culture where creativity and communication can lead to quick decisions.
"There is no bad time to innovate. You should be doing it when times are good and when times are tough... It's such a deep-seated belief, I'm not sure we have a choice.
Photo credit: LANXESS