Feedstock-sourcing challenges, uncertain trade and tax policies, new forms of competition and more demanding consumers. These trends are coalescing to put enormous pressure on chemical companies. Though most have answered the call to adapt for this era, a small group of innovative companies are distinguishing themselves. We call them the Chemical Champions.
This report explores what sets them apart.
The call for sustainability and circularity
Chemical companies are facing enormous challenges. Trade and taxes have become more complex with uncertain policies and stringent government regulations.
Competition has become fiercer, while the talent pool of engineers and factory workers has gotten scarcer. And the notion of circular economies has become popular with customers today and made them more aware and critical of how chemicals are made, used, recycled or disposed. As a result, sustainability and circularity are no longer discretionary—they now determine competitive advantage and form the basis of business transformations.
Accenture research shows that by 2025, digitization could unlock up to $550 billion of value for the chemical industry.
The chemical industry’s new value propositions
While chemical companies are facing broad economic and social challenges, they can exploit these new value propositions to capture 21st century consumer-driven opportunities.
The design advantage
Chemical companies have just begun to scratch the surface of what’s possible with digital innovation. According to our survey, they are making the most innovation investments—not surprisingly—in product research and development.
Add innovation to the mix
To truly take advantage of these new digital value propositions, chemical companies must completely reimagine the products and services they offer. They must also create new and exceptional value across key business functions, at scale, to get a return on their digital investments.
Out of the 121 chemical companies with annual revenues in excess of $1 billion we studied, less than a quarter were succeeding at scaling digital innovation in R&D and across their production and operations. These companies not only successfully scaled more than half of their proof of concepts (POCs) but also earner higher than average returns on digital investments (RODI). We call them the Chemical Champions.
Most others—more than 75 percent of the companies we researched— earned a lower than the industry average (12 percent), regardless of how much they scale. This implies that simply scaling more doesn’t guarantee success.