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Innovation: No More Time Left To Lose

Business, China, Company Strategy, Economics, Environment, Innnovation, Knowledge management, Managing people, Sustainability
By John Richardson on 11-Mar-2013


 Source of picture: http://whyfiles.org/ 


By John Richardson

MY colleague Nigel Davis has written an excellent Insight article which highlights how some chemicals companies are seeking to respond to changing patterns.

As we have discussed before, Bayer Material Science is adapting its portfolio of products in response to the megatrends – demographics, energy conservation, climate change and the challenges of providing enough food and water to sustain emerging-markets growth.

“There are many ways you can grow in chemicals but achieving anything like the growth rates of the past has become increasingly difficult,” writes Nigel.

“In the short term {and in the long term, we think], chemical companies face the prospect of slower demand from China, lacklustre growth in the US and extreme weakness in Europe.”

He uses the example of BASF and how the Germany-headquartered chemicals giant is working with Harvard University, MIT (the Massachusetts Institute of Technology) and the University of Massachusetts (UMass) Amherst.

The aim is to jointly develop new materials for the automotive, building and construction, and energy industries.

The research collaboration will involve chemists, physicists, biologists and engineers with know-how in different industries, BASF says. The trick will be to turn academic research into technically feasible products and processes.

“Topics already identified include micro- and nano-structured polymers with new properties, as well as biomimetic materials that emulate nature,” BASF said.

“The scientists are working on lightweight construction materials for wind turbines and automotive construction and on new colour effects for cosmetic applications,” it added.

“We need the creative spirit of the widest possible range of sciences to develop solutions to meet the needs of a growing world population for clean drinking water, secure energy supply and improved quality of life,” president of BASF’s Advanced Materials and Systems Research, Christian Fischer, said.

Such creative spirits will only prosper in companies that have top-line executives who both understand that the “rising tide lifts all boats” growth model of the past is over for good, and crucially, are prepared to act on that understanding.

Close collaboration with countries and local companies, as growth models evolve, is essential if companies are to adapt to the New Normal – as, of course, is the willingness to invest in R&D that will not always reap immediate share-market and quarterly profits-boosting results.

Carefully nurtured relationships with customers will also be a key ingredient for success.

“I have watched my customers grow for more than 10 years now, and as a result, have been able to grow with them,” said a source with a global polyolefins producer.

“Many of my customers in China have gone from being commodity converters of standard-grade polyethylene (PE) to highly sophisticated producers of value-added film with, for example, high moisture protection.”

If you haven’t done the groundwork already, it is going be extremely difficult to play catch-up.

BASF, for instance, is already collaborating with 600 research institutions.

There is no more time left to lose.