Innovation in the European chemical industry
A report on "Innovation in the European chemical industry" has been published by the European Innovation Monitoring System (EIMS). The European chemical industry is the third largest manufacturing sector in Europe and produces a heterogeneous range of products subject to different technical and scientific conditions and R&D goals. The study uses two methods to examine innovation trends and firm strategies in the European chemical sector. The first method is based on an analysis of 1,299 innovations described in the annual reports between 1984 and 1993 of nine of Europe's 15 largest chemical firms, while the second method is based on an analysis of the Community Innovation Survey (CIS) results for chemical firms. The report describes the chemical industry as being different from other lines of industry mainly through the heterogeneity of its products. As a result the individual product lines are subject to completely different technical/scientific conditions as well as different R&D situations. It points out that 36% of demand for chemical products originates from the chemical industry itself, other major consumers of the industry are automobile manufacturers, the construction industry and agricultural industries. The report describes the innovation trends of the 1980s and 1990s in the chemical sector. Very noticeable is a strong decrease in the number of innovations reported, (290 innovations reported in 1984/85 and 202 reported in 1992/93). This could be attributed to the major crisis of the early 1990s or an indicator for the increasing difficulty of this industry to produce innovations. The report describes the trends towards strategic cooperation, the impact of globalization and the objectives of innovation. The factors hampering innovation, are analysed in considerable detail, both by country and segments of the chemical industry. The chemical industry indicates four reasons for innovative weakness in Europe: - Excess regulation in all areas concerning R&D; - Innovation incentives too weak; - Public procurement policy does not stimulate innovation; - Not enough social acceptance of many R&D policies. The evaluation carried out highlights a number of trends in innovation in this sector, with the highest level of innovation in speciality chemicals, coatings and plastics. Other trends revealed by the CIS data include: the importance of cost leadership, particularly for basic chemicals; the importance of cooperation on R&D; and the effect of an export strategy on the need to reduce costs for process innovators.