STARTUPS DISRUPTION IN THE GLOBAL CHEMICALS AND MATERIALS INDUSTRY
Climate change and digital transformation will have significant consequences, with waste plastic becoming the most lucrative feedstock as the chemicals industry struggles to adapt to the circular economy. This will result in a more decentralized sector that will rely on economies of scale more frequently. Simultaneously, digital sales platforms will commoditize personalization, blurring the line between speciality and commodity industries. For decades, the chemical industry has grown faster than the overall economy, and innovation has been a key engine of that expansion. Materials with new performance attributes, new applications, and new solutions have been introduced to the industry's customers—and their customers' customers—through innovation. In a nutshell, industry growth has always been intimately connected to innovation. However, today's need for innovation is stronger than ever before.
Governments have set lofty goals for sustainability, greenhouse gas reduction, and the circular economy, with aggressive timetables. Climate change, clean water, green energy, and responsible consumption are all addressed under the UN's Strategic Development Goals. Customers in the sector, on the other hand, must satisfy their own sustainability targets and pursue growth in areas like electric vehicles, batteries, and 3D printing. Overall, these changes will necessitate a wide range of innovative chemical products, presenting the chemical sector with a huge growth opportunity.
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Disruption Is Becoming More Likely
Customers face a variety of issues for chemical firms, which will eventually result in a fast expanding demand for lower-carbon, more sustainable, and circular products. As firms and countries try to fulfill ambitious GHG emission and net-zero carbon goals by 2050, this need is anticipated to grow. However, existing industry investment patterns do not match that shift in demand. Indeed, they may have a tendency to "lock in" resources to today's technologies and procedures, making future innovation all the more difficult. If chemical businesses fall behind in the race to offer more innovation on more fronts, they risk being unable to capitalize on the significant growth prospects created by shifting demand. Worse, they run the risk of being disrupted by new industry entrants who can progress along the innovation curve more quickly.
Conclusion
For the future, today's approaches to innovation will not be enough. Chemical businesses will need to reorganize their innovation activities to limit the risk of disruption and to capitalize on new growth prospects. They'll require new risk-taking strategies, new technology, nimble R&D and technology teams, and business-driven KPIs that prioritize innovation. But, more importantly, they will have to question conventional wisdom, rebuild outdated line-management systems, and go beyond the short-term profit-driven mindset that stifles innovation. They'll have to shift a paradigm that's been in place for more than a century, making the CEO's rethinking of innovation a business imperative. Decarbonization, the circular economy, renewable energy, and new technologies provide new difficulties for the chemical sector, but they also drive demand for new products. Chemical firms have a lot of options in this changing environment. new products, services, and processes.
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