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European chemicals: The innovation and growth opportunity

European chemical companies can turn to their core competency of innovation to reignite growth.

In Europe, chemical companies are facing stagnant sales, and they need to focus on reigniting growth. One key way to do so is through new approaches to innovation.

The need to rethink innovation is evident when one looks at the significance of various regions’ patent citation figures. In past analyses, Europe was second to the United States in this area. But China has now surpassed Europe for the first time. European patents relating to polymers—an area at the heart of European chemical industry innovation—now have a decreasing impact, as shown in Figure 1.

TechFactor 2010-2014

To help turn that around, European chemical companies can explore more sustainability-related products. A growing emphasis on sustainability is one of the key megatrends reshaping business and the industry (see more on megatrends). In line with that megatrend, the data shows that there is an increasing number of recycling patents in Europe.

There is one exception. One of the most-cited patent areas globally over the past five years is polysaccharides. These are typically from natural sources and have a variety of possible sustainability-related uses. Yet European chemical companies are underrepresented in this particular product area, which points to an opportunity for increased innovation.

European chemical companies can also take a broader view of what they offer. Some segments of the industry, such as specialty chemicals, have been migrating from a product-centered selling model to a value-added services model. European companies have an opportunity to extend that concept by using digital technology to enable the sale of outcomes. For example, instead of simply selling chemicals, a water-treatment chemical company could draw on sensors and analytical software to offer customers specific quantities of guaranteed clean water.

At the same time, European chemical companies can look at how they innovate and move to R&D approaches that are more agile and disruptive. This is likely to involve “extended collaboration” that connects a variety of external entities such as customers, universities, government bodies, research institutions and independent experts.1 Such collaboration is already taking place among chemical companies serving innovation-focused industries—and much of that collaboration is centered on sustainability. For example, Newlight Technologies has entered into an agreement allowing IKEA to use its carbon-capturing technology to produce CO2 based thermoplastics.2 Ford Motor Company is working with start-up Novomer to substitute petroleum-based plastic foams with CO2 based plastics.3 And small electronic-device producer SEB is collaborating with Veolia to further extend its circular model for recycled plastics in electrical/electronic applications.4

In all of this, it important to remember that innovation has been, and still is, a core competency of the European chemical industry. With a significant number of their European customers being in world-class, innovation-focused industries, European chemical companies have unique growth opportunities. New approaches to innovation could help them exploit those opportunities.

1 “Digital Disruption in the Lab: The R&D of Tomorrow,” Accenture, 2015,
2 “Newlight Signs Supply, Collaboration, And Technology License Agreement With IKEA,” PR Newswire, March 1, 2016,
3 “Ford to Make Cars from CO2?,” Servicing Stop FORD, July 6, 2016. Factiva, Inc. All Rights Reserved. 
4 “Groupe SEB, Veolia and Eco-systemes create the first industrial partnership for small household appliance recycling in France,” ENP Newswire, February 8, 2016. Factiva, Inc. All Rights Reserved.