Green Chemistry. Innovation in the Chemical Industry

How do inventions in green chemistry, especially in the promising field of catalysis, affect innovation in the chemical industry?

Term Paper 2017 22 Pages

Economics - Innovation economics




2. Review of Literature
2.1 Innovation in chemical industry
2.1.1 Categories of innovation in chemical industry
2.1.2 Critical innovation success factors for companies highly relying on R&D - the three P’s
2.1.3 Substream: F3 -Factory
2.2 Green chemistry - the innovative state-of-the-art field in chemical industry
2.2.1 What is green chemistry?
2.2.2 The impact of green chemistry on a company
2.2.3 Substream: Supporting the shift towards green chemistry by sustainability marketing
2.3 Catalysis - a driver for economic, social and environmental benefits

3. Synthesis of Literature Review

4. Example from case studies
4.1 Elevance Renewable Sciences
4.2. Monsanto Company

5. Discussion of the Cases in the light of the Literature Synthesis

6. Conclusions



That the global chemical industry with a worth of $2 trillion (1) has an enormous impact on economy, society and the environment, is undisputed. However, with regard to the nowadays unstable economic and political situation worldwide, an increasing rate of development in science and technology and higher customer demands, chemical companies have to struggle for competitive advantages.

A key factor for a company to maintain its market position and even enlarge it is successful innovation. Furthermore, the direction of innovation plays a major role for sustainable growth of a company.

Nowadays, the basis of innovation in chemical industry is defined by sustainability and environmental protection due to climate change, pollution and therefore stricter regulations. But of course every manufacturing company, as most of the companies in chemical industry manufacture, searches for ways to produce more efficient, faster and cheaper. So might there be a way to combine both desires and transform the chemical industry to be more sustainable and increase their economic benefit at the same time?

Even if one can hardly imagine, “green” chemistry is about to achieve both of these goals and leads to transformational changes in chemical industry due to “green” innovations in various chemical fields. Pike Research, a market research and consulting firm, predicts that “green chemistry represents a market opportunity that will grow from $2.8 billion in 2011 to $98.5 billion in 2020” and, which is also extremely promising for chemical companies, that green chemicals will save industry $65.5 billion by 2020 (2).

Various chemical inventions and technological developments, for example in the expanding field of catalysis, set the basis for the production of new, less-hazardous and multifunctional chemicals, which is at the same time more efficient and environmentally friendly.

Hence, the impact on chemical industry through inventions in the field of green chemistry is obviously enormous. But how exactly do inventions in green chemistry, especially in the promising field of catalysis, affect innovation in chemical industry?

Therefore, to find an answer to this question, the field of green chemistry and its potential to foster innovation in chemical industry is going to be examined in this work.

A large body of literature has been concerned to deal with this central question and selected facts and topics will be discussed in the part of the review of literature.

First, innovation in chemical industry will be analysed generally. It is going to be discussed where innovation in a chemical company can occur and what the inspiration for innovation is in these fields. After, the key factors for successful innovation are going to be shown. Then, the concept of the future F3 -Factory (Future, Fast, Flexible) as a visionary idea of a future chemical company will be discussed.

Second, green chemistry as the state-of-the-art innovative field in chemical industry will be introduced. A short historical background, a definition and the twelve principles of green chemistry are going to be named. Furthermore, the areas in which green chemistry is applied and important in companies are discussed and compared with the outcomes of the first part. In this context we are going to focus more specific on sustainability marketing and its meaning for green chemistry.

Finally, we are going to examine the specific field of catalysis in the context of green chemistry. It will be made clear why catalysis is not only a driver for innovation in chemical industry but that it also propels the shifting of chemical industry towards green chemistry. Finally, the relation of catalysis to the selected case studies, which serve in this context as a substream, will be illuminated.

After this, the synthesis of the literature review will summarize the findings and set in relation to each other. To finish this part, a synthetic framework is elaborated which illuminates the relation between innovative green chemistry and a chemical company. Finally, the way from green chemical inventions to economically, socially and environmentally benefitting innovations is analysed and explained.

In the following part, the case studies about Elevance and Monsanto, which serve as substreams concerning chapter 2.3 about catalysis, are discussed. These cases were selected because both of the companies won the Presidential Green Chemistry Award thanks to their transformation of green catalytic inventions into successful sustainable innovations.

The case studies will be further analysed in the light of the review of literature in the next part which is followed by the conclusion.

To summarize, this work considers the question how inventions in the chemical industry lead to successful innovations which lead to economic, social and environmental benefits. A driver for innovation in the chemical industry nowadays is green chemistry and, more specific, catalysis. That this is an urgent topic with a tremendous importance on the future of the chemical industry is made clear by various facts and explained conclusions.

2. Review of Literature

2.1 Innovation in chemical industry

That innovation leads a company to sustainable growth, success and value is generally acknowledged. Though, the impact of innovation on chemical industry can be seen as even vaster due to its worldwide impact on economic, social and environmental aspects. The chemical sector serves the manufacturing of five major categories of chemicals: basic chemicals, specialty chemicals, consumer products, agricultural chemicals and pharmaceuticals. Chemical products are therefore not only involved in most process industries but they are also an integral part of everyone’s everyday life. To adapt to the more and more rapidly growing markets, increasing customer demands and stricter regulations and policies, innovation in chemical industry is inalienable.

2.1.1 Categories of innovation in chemical industry

Due to the uniqueness of the structure of chemical industry, innovation can arise there in four main categories (Gawad et al., 2014) as they are outlined in figure 1.

It is obvious that product innovation plays a huge role in chemical industry as it is characterized by value creation through manufacturing. This includes not only innovation to the physical product but also innovative services concerning the product or separate businesses. At this point it becomes clear that the innovation process in chemical industry nowadays goes well beyond simple R&D. To compete in an economic environment that has become much more fast, aggressive and competitive to meet customers’ needs, market orientation plays a key role for innovation. The pivotal change from technology to market driven thinking therefore craves for product innovation, including both physical products and services.

Closely related to product innovation are innovative manufacturing processes as they, if successfully implemented, can save costs and increase efficiency. The Monsanto case which is going to be discussed later in this work illuminates a manufacture process innovation and its benefits. But innovation in chemical industry doesn’t stop at chemistry and manufacturing. Every process across a company in chemical industry can possibly be transformed by innovation. This goes from innovation in business processes, such as improved human resource processes to select better talents, to new innovative business models of a company, e. g. separate commodity businesses. Changes across the whole company are needed to satisfy the demands of growing complexity and highly cross-linked processes.

illustration not visible in this excerpt

Figure 1. The four categories of innovation which are most important for manufacturing companies, i.e. chemical companies are shown in this scheme (Gawad et al., 2014).

2.1.2 Critical innovation success factors for companies highly relying on R&D - the three P’s

Especially for branches with a high dependency on scientific findings and the quality of R&D like the chemical industry, there are three critical innovation success factors, namely the three P’s - people, processes, and partnerships (R. M. Gross, 2003).

Hereof, people are considered as the most important factor for successful innovation because of mainly three reasons. First, people define their environment and therefore, to evolve an innovative environment it acquires the appropriate people. Proactive teams have to be built so that everyone is able to aim the different aspects of innovation in accordance with their individual abilities. The accurate resource deployment is therefore crucial for innovation. Second, ideas, which is the very heart of innovation, are created by people. Third, sharing ideas is the first step to use the advantage of teamwork rather than the work of a single person. People have to listen to each other and combine their ideas by sharing them in order to achieve the highest innovative outcome.

Next, work processes which provide a guideline for an innovation process are especially required for highly complex innovation tasks which is mostly the case in chemical industry. The last critical determinant for successful innovation is partnerships whose number is increasing in chemical industry. Reason for this is the increasing degree of specialization and therefore industry is restructuring. Furthermore, to be the first in the marketplace a company has to keep their focus on the speed of product launches, but because of the fast change of the market and its influences, such as customer needs, competitors and technology, it is not possible to possess all the right skill sets internally at the same time. Partnerships face these needs. Finally, as it was already mentioned above, the change of technology to market oriented thinking occurs and this requires as well much higher skill sets. To meet unmet customer needs, partnerships are therefore indispensable.

2.1.3 Substream: F3 -Factory

A concept which converts all these findings above into a practical model is the concept of the F3 - Factory (Future, Fast, Flexible) which is a visionary idea for the future of chemical production (Centi, Perathoner, 2008; (3)). This project was launched in 2009 to enhance the EU chemical industry’s competitive position by developing faster, more flexible and efficient manufacturing methods. It is innovative in all the four mentioned categories where innovation can occur in a chemical company. It is product innovative due to the targeted development of “solvent-free specialty polymers, innovative surfactants, compounds for the healthcare industry and materials from renewable sources” (Britest Ltd, F3 -Factory Consortium, 2010).

The heart of this project is about modularising chemical manufacturing and developing new standards which revolutionizes chemical manufacture processes. Therefore, it is a paradigm for innovation in manufacture processes which again influence business processes and force innovations in that field. Due to the modular structure of the manufacturing it creates a basis for new business processes because of high production flexibility, facilitating of new processes and possible delocalization of chemical processes. This again is able to revolutionize chemical companies’ business models because chemical manufactures won’t have to be fixed on one location and individual customer needs can be met much cheaper, faster and more sustainable.

2.2 Green chemistry - the innovative state-of-the-art field in chemical industry

After this general approach to innovation in chemical industry, a specific area is going to be more illuminated - the state-of-the-art field of green chemistry. Since its inception around 25 years ago, green chemistry is one of the most promising, innovative and important directions towards which the chemical industry emerges. It is a possibility for companies in the chemical industry to achieve as well environmental and economic prosperity.

To understand the great potential of that field, a short historic background, a definition and the scope of green chemistry will follow.

2.2.1 What is green chemistry?

The sustainable movement in the chemical industry was mainly forced by the US government when the Pollution Prevention Act was established in 1990 (Pollution Prevention Act, 1990) to face the growing destruction of the earth due to pollution. In 1991, the first research initiative, the Alternative Synthetic Pathways research solicitation was launched in order to find ways to prevent waste from the beginning instead of dealing with hazardous outcome. This step marks the official beginning of the green chemistry movement as it shifts from the former “command and control” treatment with environmental issues towards pollution prevention in the first place (Anastas & Kirchhoff, 2002).

The worldwide impact of green chemistry in various fields such as industry, research and education, has enormously grown since then and in 1998, Anastas and Warner defined green chemistry as “the invention, design and application of chemical products and processes to reduce or to eliminate the use and generation of hazardous substances.” (Anastas & Warner, 1998).

They furthermore elaborated the “Twelve Principles of Green Chemistry” which can be seen in the following figure. These principles do not just serve as a guideline for scientists for further research but they also define a frame for the chemical industry about how a company and their business should be shaped.



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Athens University of Economics and Business
Innovation Management Chemical Industry Green Chemistry Sustainability

Title: Green Chemistry. Innovation in the Chemical Industry