Emerging Growth Is Evolution

vnkMgzn 2 EvonikMagazine

EvonikSEIZING OPPORTUNITIES EARLIER Magazine2 | 2012 | 2012

Emerging Growth is evolution. 100 ideas from around the world

01_Evonik_02-12_EN 1 05.10.12 15:30 EDITORIAL 3

www.evonik.com The Power of Ideas The issue of growth is a matter of concern for us at all levels of the Group. It’s also a burning social issue throughout Europe and all over the world

Dear readers, “Growth” is a buzzword that means different things to different people. Its ideological connotations have polarized the general discussion about growth and led to a division of society into advocates and opponents. This conflict can be seen in some of the articles in this issue, such as the interview with Dennis Meadows, who is probably the best-known critic of growth. Meadows coined the definitive term “the limits to growth.” PHOTOGRAPHY: BENNO KRAEHAHN PHOTOGRAPHY: Dr. Klaus Engel, CEO of Many opponents of growth doubt whether it is possible to structure the Evonik Industries AG production and consumption of goods, both of which are increasing all over the world, in an environmentally friendly way. This is a controversial issue, because it raises the question of who has the right to prescribe other people’s behavior. For example, the attempt to curb the Asian middle classes’ desire to drive cars, consume energy, and use land is being increasingly regarded as Western arrogance in the regions that are affected. We should not overlook the fact that the discussion of growth is now no longer limited to the old industrialized nations. On the contrary, it can help to set the course for a global population that is expected to grow from seven billion today to nine billion by 2050. This growing population will enrich the global agenda by adding themes we can’t even imagine today. One approach will certainly not work: the steady projection of the current state of affairs into the future—whether it’s the negative prognosis of Dennis Meadows or positive forecasts that tend to overestimate We make plants grow in the effects of the sustainable technologies we have already developed. the desert so that deserts Ultimately we always end up with issues of belief. But there’s one don’t grow any bigger. thing we can be sure of: Human inventiveness has always been able to find solutions for urgent problems—new solutions that no one had thought of before. Why should this be any different in the future?

"XJOOFSGPSUIFFOWJSPONFOU PVSTVQFSBCTPSCFOU I hope you’ll find inspiration in this issue of Evonik Magazine. 450$,0403#® GPSJOTUBODF IFMQTXJUISFGPSFTUBUJPO JO.PSPDDP*UJODSFBTFTUIFTVSWJWBMSBUFTPGTBQMJOHT CZVQUPQFSDFOU UIVTIBMUJOHEFTFSUJGJDBUJPO 5IF&VSPQFBO$IFNJDBM*OEVTUSZ$PVODJMIPOPSFEUIJT JOOPWBUJWFTPMVUJPOXJUIJUT3FTQPOTJCMF$BSF"XBSE

Evonik Magazine 2 | 2012

02_Evonik_02-12_EN 2 05.10.12 15:07 03_Evonik_02-12_EN 3 05.10.12 15:31 4 CONTENTS CONTENTS 5

Mind Map on growth starts on page 16 EDITORIAL 42 Growth from Zero Authors in this issue: 3 The Power of Ideas Creativity is the cheapest and best The issue of growth is a matter of concern for us raw material. It puts companies and Christine Mattauch, at all levels of the Group. It’s also a burning countries on the road to success New York, reports on social issue throughout Europe and all over the world the comeback of the 47 Flying Luxury Class US auto industry with China’s aviation industry is booming INFORMING “green” models

6 Above and Beyond 48 E-shopping via Hand Carts Klaus Jopp, Internet shopping is booming in India—ever since Three minutes with… Chemist Dr. Paul Mahaffy, who Hamburg, reports on his providers adjusted their systems to local conditions headed the development of the Mars laboratory SAM visit to a mobile chemistry Culture: Personal growth. What art and culture have to 51 The Next Einstein… plant and shows how flex- say about growth ible the Evotrainer can be World map: …and yet it’s still growing! Where …will be African. New universities are promoting business and prosperity are making the most progress up-and-coming young mathematicians and scientists Marcus Bensmann, Almaty, analyzes the GROWTH 52 A Traveling Chemical Factory Customized mini-laboratories are decentralizing the economic boom in 10 Growth Requires Acceptance production of chemicals on the customers’ premises the steppe landscape A discussion with contributions by Dr. Klaus Engel, of Kazakhstan CEO of Evonik Industries (Essen); Dr. Fred Luks, GLOBAL sustainability manager at Bank Austria (Vienna); Stefan Mauer, Prof. Karl-Heinz Paqué, professor of international 57 Where the World Is Growing Mumbai, explains how economics (Magdeburg); Prof. Niko Paech, South Africa: Evonik is supplying Africa with Plexiglas tradition and modernity adjunct professor of production and environment from this booming economy on the Cape are shaping the (Oldenburg); and Cardinal Reinhard Marx, China I: Lightweight construction materials from course of growth in India Archbishop of Munich and Freisingen Evonik are contributing to the boom in electric cars Jakob Vicari, 16 Mind Map and Who’s Who China II: Sven Augustin from the Automotive Industry Team comments on China’s role in electric mobility Hamburg, investigates More money, greater prosperity, a better quality what creativity, the of life—theories, dreams, and facts about economic Canada: How the Corporate Venturing unit at Evonik world’s cheapest raw growth. An overview of this issue’s main theme helps young high-tech companies material, can achieve 22 The Return of the Doomsayer Russia: Boosting efficiency in the Russian livestock Christian Tröster, Prof. Dennis Meadows’ global bestseller The Limits industry through the use of Biolys Hamburg, presents five to Growth was published 40 years ago. What kind of USA: Expanding Biolys production in Nebraska, products that have be- impact is his approach still having today? one of the major corn-producing regions come global bestsellers 28 Comeback in Green Brazil: Evonik is building a Biolys production plant in within five years cooperation with the US feed producer Cargill The US auto industry is on the road to recovery from the recent crisis and is presenting a broad range Tom Schimmeck, of fuel-saving models LIVING Küsten, looks at 62 On the Trail of the Hippo the mystery of how nature regulates 32 The Boom Years Tom Schimmeck on the riddle of how nature regulates biological growth Oil and rare earth metals have made Kazakhstan rich. biological growth Now the challenge is to safeguard the country’s future A jungle of cables in India’s capital, New Delhi prosperity Dr. Brigitte Röthlein, FINDING There is hardly another region in the world that is growing as dramatically as the Indian subcontinent. India is rushing into the Internet Munich, explains the on- age with giant steps. Online shopping, software development, and call center services for customers all over the world are booming. 37 How Products Create Markets 63 At a Glance going influence of Dennis However, the success of these glittering high-tech industries is hanging on fragile cables. The country’s infrastructure is old and overburdened. Coffee capsules, LED lamps, electric bikes, apps, The product finder makes it possible to locate Meadows, the author Last summer, three regional power grids in India failed and over 600 million people had to cope with temporary blackouts and NFC cards have become global success stories Evonik Industries products in this issue of The Limits to Growth

You can also ﬁ nd MASTHEAD Publisher: Office Manager: Editor in Chief: Art Direction: Documentation: Publisher and address: Printing: Neef+Stumme Questions about Biolys®, PLEXIGLAS®; Evonik Industries AG Stefan Haver Urs Schnabel (responsible for Wolf Dammann Kerstin Weber/ Hoffmann und Campe premium printing, Wittingen Evonik Magazine: Rent-a-Plant®, ROHACELL®, and this issue of Evonik Christian Kullmann editorial content) Kontor Korrekt Verlag GmbH, Telephone VESTAMIN® are registered trade- Consulting and Concept: Design: Copyright: © 2012 by Rellinghauser Straße 1–11 a company of the +49 40 68879-139 marks of Evonik Industries AG Magazine online at Manfred Bissinger Final Editing: Teresa Nunes (Head), Translation: Evonik Industries AG, Essen. 45128 Essen GANSKE VERLAGSGRUPPE Fax or one of its subsidiaries. They are Michael Hopp (Head), Anja Giese/Redaktion 4 TransForm, Cologne Reprinting only with the per- indicated in capital letters through- www.evonik.com and Germany Harvestehuder Weg 42 +49 40 68879-199 Christiane Oppermann mission of the publisher. The out the text. Picture Desk: 20149 Hamburg e-mail content does not necessar- as an iPad app Managing Editor: Ulrich Thiessen, Germany [email protected] ily reflect the opinion of the Stefan M. Glowa Beatrice Linnenbrügger e-mail [email protected] in the App Store publisher. COVER PICTURE: ANDREJ BAROV, NASA PHOTOGRAPHY: BLOOMBERG VIA GETTY IMAGES, PRIVATE (8)

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

04_Evonik_02-12_EN 4 05.10.12 15:31 05_Evonik_02-12_EN 5 05.10.12 15:31 6 INFORMING INFORMING 7

Research Evonik in figures Culture Chemist Dr. Paul Mahaffy headed the development A Chemistry Lab on Mars €48 million was invested by Personal Growth of the SAM Evonik in environmental protection The Curiosity rover analyzes soil samples on Mars in 2011. The Group’s energy-re- Business on stage: Artists came together in Bayreuth, Zurich, and lated greenhouse gas emissions fell Hamburg to ﬁ nd answers to some of the world’s pressing economic issues The third automated rover landed safely on the surface of Mars on August 6 at by 17 percent compared to 2004. 1:32 a.m. Eastern Daylight Time (7:32 a.m. Central European Time). The rover, which is named Curiosity, is controlled from NASA’s Space Flight Center on the 24,000 patents were held East Coast of the USA. At $2.5 billion, Curiosity is the most expensive mission by Evonik in 2011. They included ever to have been sent to Mars to look for organic substances. However, liquid 300 new patents filed last year. water, which is a precondition for all life on earth, cannot exist on Mars. The research project’s main task is to conduct sophisticated chemical analyses. million was invested by The U.S. space agency NASA is studying rock samples in order to get a better €350 Evonik in the production of the idea of the living conditions on Mars. animal feed amino acid L-lysine in To conduct these analyses, Curiosity is equipped with a very sophisticated Russia and Brazil. mobile chemistry lab. Called the Sample Analysis at Mars (SAM) instrument suite, Three minutes with… this system was specially developed for the mission by the Atmospheric Experi- ments Laboratory at NASA’s Goddard Space Flight Center in Greenbelt, Mary- 15 new jobs were created as a

land (USA). SAM is the rover’s main component, and it examines the mobile geo- result of the construction of a DDP IMAGES/DAPD PHOTOGRAPHY: Paul Mahaffy chemical robot’s finds with the help of a mass spectrometer, a gas chromatograph, big polybutadienes facility in Marl, Traveling salesmen caught in a data network: At the Bayreuth Festival, Jan Philipp Gloger turned Richard Wagner’s and a laser spectrometer. Germany. The Flying Dutchman into an opera about businesspeople in an existential crisis When the Fun Begins Measurements like these provide scientists with insights into past and present The question that Dr. Paul Mahaffy asks himself sounds simple: Martian environments and climates. The mass spectrometer can detect and sepa- 34 percent of the eligible em- From the euro crisis and bank bail- hero pulls a wheeled suitcase and By contrast, the exhibition titled “Is there life on Mars?” Mahaffy, who manages the Atmospheric rate different elements and compounds. The gas chromatograph, meanwhile, ployees acquired usufructuary outs to looming social security cuts, carries a coffee-to-go cup as the “Capital. Merchants in Venice and Experiments Laboratory at NASA’s Goddard Space Flight Center, vaporizes rocks and dust and analyzes the resulting gases to determine their com- rights as part of the “Mitwachsen” major economic events are increas- symbols of a modern-day business- Amsterdam” throws light on the is an expert in the development of space flight-compatible position. The laser spectrometer is used to determine the proportions of different profit-sharing program in 2011. ingly impacting daily life. These man. However, he is sick of all past. The exhibition is being shown instruments. The answer to his question about life on Mars is isotopes in the rock samples. issues are now being addressed not of the pleasures he can buy with at the National Museum in Zurich, contained in the planet’s rocks. Whether organic substances The six-wheeled rover also has a chemical camera (ChemCam), which re- 150,000 metric tons of only in the business sections of money, and instead yearns for a Switzerland, where it will run until exist on the “red planet” is still an open question; another one is moves dust from rock surfaces so that it can analyze them with laser beams. methionine will be produced newspapers but also on the litera- home, for faithfulness, and for love. February 17. Using exhibits such as whether Mahaffy’s latest brainchild, the SAM, can find them. The Chemistry and Mineralogy instrument (CheMin) is located within reach of by the facility that is planned to go ture and arts pages, which treat The limits of capital and growth ship models, business handbooks, The acronym SAM stands for “Sample Analysis at Mars the robotic arm. It identifies minerals by shooting a strongly focused X-ray beam into operation in Singapore at topics such as: Does wealth make were also the topic of an 11-hour- and one of the world’s first com- instrument suite,” one of the systems the Curiosity rover is using at rock samples. The reflected light reveals which minerals the samples contain. the end of 2014. As a result, annual people satisfied? To what extent long happening at the international pany shares from 1606, it tells the in its search. The SAM is a key component of this endeavor, The scientists can also use this information to determine under what conditions production capacity will rise to can the economy and the environ- summer festival at Kampnagel in story of the origins of the modern because, as Mahaffy explains, “Whenever we think that we the rocks were formed. 580,000 metric tons. ment be reconciled? Can a balance Hamburg. In line with the event’s economy. Curator Walter Keller should take a closer look at a rock, we drill into it to take a sam- Last but not least, the Alpha Particle X-Ray Spectrometer (APXS) on the rov- be found between work and fam- slogan, “Fully Grown,” the orga- got the idea for the exhibition ple. This bit of powdered rock is then inserted into the SAM’s er’s robotic arm helps scientists identify elements on rock surfaces. The instru- ily? And what does all this have to nizers focused on the topic of while dining with friends during oven. The ambient temperature heats the powdered rock to ment can provide researchers with a rough overview within ten minutes and de- do with happiness? growth from a variety of perspec- the recent financial crisis. “Every- 1,000 degrees Celsius, causing it to emit simple or complex liver precise results within two to three hours. A newspaper’s literature and tives. The events included presen- one there knew what they thought gases, which help us determine which mineral components the arts section may be the right place tations, drink performances, and of capitalism, but almost nobody Evonik in words rock contains.” Only suitable rock samples that have been A six-wheeled chemistry lab in outer space: A self-portrait (below left) composed for such discussions, since artists rock concerts, and the participants had any idea of how and where it specially prepared can be inserted into the SAM. An initial as- of several images depicts the Mars rover’s vehicle deck. The Sample Analysis at Mars are increasingly addressing these even established political parties. arose,” he explains. The exhibition sessment of a rock’s suitability is performed by a high-resolu- (SAM) instrument suite (below right) is only slightly larger than a microwave oven “In a global corpo- and similar questions. In addition to For example, the artist Boz Tem- focuses on Venice and Amsterdam tion camera that is mounted on top of the rover’s mast. Dr. Rainald Goetz’ novel about the ple-Morris from London staged a because these two cities’ mer- A lot of work had to be done before Curiosity could be ration, innovation rise and fall of CEO Johann Holtrop, bizarre audio drama about a ham- chants laid the foundations of our launched. “We had to get a suite of instruments that would take economic issues are currently ster that refuses to stop growing, modern economic system. The Ve- up a lot of room here on earth into a box the size of a micro- isn’t a solo being addressed by three art events turning the monstrous rodent into a netians introduced double-entry wave oven,” says Mahaffy. in Germany and Switzerland. At happening itself. The Hamburg bookkeeping, which is still the ba- How likely is it that there’s life on Mars? The conditions on the performance; it’s the Bayreuth Festival, for example, theater director Sibylle Peters also sis of every balance sheet today. planet are certainly very forbidding, as the atmosphere is extremely stage director Jan Philipp Gloger addressed the topic in an unusual The exhibition presents crucial facts thin, allowing intense ultraviolet and cosmic rays to reach the sur- the task of all recently transferred Richard Wag- way. In her live performance titled about business and economic face. “Even if we don’t find any organic life, that in itself would be a ner’s The Flying Dutchman into Let’s Make Money!, she drew up growth. The exhibits’ appealing valuable piece of information,” says Mahaffy. “It could mean that the employees.” the postmodern age, turning it into a future scenarios on an umpire chair presentation makes them inspiring the best place to search for life is not on the planet’s surface but in drama about a traveling salesman and allowed the audience to vote and may help us in our own layers deeper underground.” Mahaffy is convinced that “if organic Dr. Peter Nagler, who has lost his roots and is caught on topics such as whether the euro personal growth—which is exactly

substances do get discovered, that’s when the fun will begin.” (3) NASA PHOTOGRAPHY: Chief Innovation Ofﬁ cer Evonik in a data network. The eponymous is likely to survive until 2019. what art and culture tend to do.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

06_Evonik_02-12_EN 6 05.10.12 15:33 07_Evonik_02-12_EN 7 05.10.12 15:33 8 INFORMING INFORMING 9

48,181 22,277

40,198

3,106 10,408 1,487 143 141

…and Yet It’s Still Growing Russia 3,893 High oil prices and strong increases in demand will boost Europe and the USA have sailed into some stormy seas, 3,286 economic growth as will increased spending on the military but on the horizon there is hope for the world economy 82 81 and the social welfare system

Germany The world economy is growing. In 2011 it grew Moderate growth: per capita GDP by 3.8 percent and it is still expanding. The business will rise, while the population will shrink. Germany will remain the consulting firm Bain & Company is predicting strongest economy in the euro zone an increase of 40 percent in gross domestic product (GDP) worldwide to US$90 trillion by 2020—despite the financial and debt crises. 53,761 The experts at Bain expect this global trend to inten- 59,707 sify. They have already taken into account the 19,705 43,015 accumulation of short-term crises in industrialized 46,900 countries and emerging markets and the structural 14,526 changes in the world economy. One fifth of the world’s 6,696 population will move up into the middle class where 5,488 consumption is strong. Spending on education and healthcare will continue to climb and technological 127 125 innovations will be more in demand than ever before. 310 337 Emerging markets and developing countries will Japan experience significant increases in prosperity, whereas One of the leading industrialized nations in Asia. It has a broadly based economic Europe and the USA will remain stable. structure that is export oriented and highly USA developed technologically. Japan will With a GDP of around $14 trillion, the be facing the problem of a greatly aged Gross domestic product (GDP) USA still has the world’s most powerful population in 2010 in billions of US dollars: economy. But according to current Value of all the goods and predictions, China will overtake the services produced in a national USA by 2020 1,387 240 263 6,903 economy in one year 1,812 1,225 708 2,981 15,985 ≤10 3,268 11,089 Indonesia 195 210 10.1–49.9 2,143 The shooting star in the Pacific region. This country, which has a wealth of 50–99.9 raw materials, achieved an economic growth rate of 6.5 percent in 2011 100–499.9 Brazil Today half of all Brazilians are in the middle class with an annual 500–999.9 income of over US$5,000. Structural problems like the lack of an adequate pension program, low levels of spending on education, 2,906 1,000–2,499.9 and a two-class system for providing healthcare services remain 1,598 1,342 2,225 2,500–4,999.9 India ≥5,000 With an economic growth of 6.9 percent, Health as an engine for growth: India is one of the world’s most successful No data countries. But with a per capita GDP of SOURCE: IMF More prosperity leads to increased spending below US$2,000, it is still considered a 1,388 developing country in trillions of US dollars 10 1,341 Economic growth Developing countries Indicators of economic performance Industry as an engine for growth: 9 BRIC countries (Brazil, Russia, Technical innovations ensure progress 12,714 India, and China) GDP per country in billions of US dollars (2010 and forecast for 2017) Other emerging markets •Steam engine •Information technology 6 Japan •Iron •Nuclear technology 2010 2017 6 Western Europe •Textiles •Aerospace technology 5,930 Per capita GDP in US dollars First phase First phase First 9,152 (2010 and forecast for 2017) USA 4,421 3 2010 2017 Older populations in industrialized •Electrification •Nanotechnology countries and increasing •Steel •Biotechnology China Population in millions Economic growth here is slowing, but at nine percent prosperity—which leads to Revolution Industrial •Chemicals •Artificial intelligence (2010 and forecast for 2020) (including petroleum) Revolution Information it remains very high. With a per capita GDP of over 0 better healthcare—in •Robotics emerging markets are causing •Railroads and autos US$5,000, China is the largest emerging market and 2010 2020 2010 2020 phase Second phase Second •Data networks will overtake the USA as the world’s largest economy spending to rise rapidly Telegraph/telephone • in only a few years SOURCE: IMF/UNITED NATIONS SOURCE: BAIN & COMPANY SOURCES: BAIN & COMPANY

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

08_Evonik_02-12_EN 8 05.10.12 15:33 09_Evonik_02-12_EN 9 05.10.12 15:34 10 GROWTH FORUM » Growth Is Not Possible without Social Acceptance We need to have faith in the future and create a new culture of opportunity in order to improve the prospects of young people in Europe—says Dr. Klaus Engel, Chairman of the Executive Board of Evonik Industries AG. What type of growth do we need today? Five experts offer their opinions

WE’RE CURRENTLY EXPERIENCING a very dan- mentation. We stand for the future, not for the past, empty phrases or try to fool people into thinking they bluntly, adhering exactly to government debt lim- DR. KLAUS ENGEL gerous dimension of the European debt problem. The and everyone has to understand this in their minds actually have a say in things. This applies to both sides its and saving the euro are goals that can hardly be gave the address "Rediscovering the Future disillusionment didn’t begin in Europe, however. It’s and hearts. That’s the only way to ensure we don’t of the debate, as sometimes the quality of the criticism achieved simultaneously. It’s also true that our will- We Thought We Had Lost," been four years since the Lehman Brothers invest- lose our young, qualified, and talented people to com- we hear deteriorates to the level of theatrical lamenta- ingness to safeguard the future of Europe by making at the Politisches Forum ment bank in the USA failed. That’s four years during panies abroad. Only a new, well-educated, and highly tion. Nevertheless, it’s still important to make things a substantial political and financial contribution does Ruhr on September 10, which we Germans have learned to view “crisis” as a motivated generation can keep us on top in the global better than they are now. We need to imbue prod- not come without conditions. And that’s exactly how 2012 permanent state of affairs and “future” as a synonym competition between the world’s young and old in- ucts and services with more individual and social util- it should be. We can only provide assistance to coun- for uncertainty and danger. But where is our Euro- dustrial regions. ity, make them more efficient, and ensure they do not tries that are prepared to adopt a firm policy of debt pean declaration of independence from this misery use resources in a wasteful manner. I think we can all consolidation. The principle here must be that we of defeatism? And what about our right to the pur- We need social participation! agree on that. will make no commitments without receiving some suit of happiness? The industrial society is not an amusement park; it’s The chemical industry not only drives growth with in return, and there will be no solidarity without re- As a business executive, I feel I have a special re- a forum for continual conflicts of interests and lobby- exactly these aspects in mind but also offers solutions forms. Our goal must be to create a future for Ger- sponsibility to help create jobs and make prosperity ing—and that’s how it should be. The struggle between for the major problems of the future. Consider, for ex- many in a strong and increasingly integrated Europe possible for future generations as well. Of, course we different interests is also a core attribute of a culture ample, a company that makes high-quality animal feed that is capable of making itself heard on the geopolit- are not completely responsible for what a new gener- of opportunity. That in itself is not enough, however, additives that help a growing global population satisfy ical world stage. ation does with the opportunities it’s given. However, because any credible culture of opportunity must also its rising demand for meat—without putting an addi- Our government needs to address pressing issues it is our job to ensure sufficient opportunities are cre- include a social dimension. A growth-driven economy tional burden on the environment. Other examples in a way that generates utility. It must implement a ated to begin with. needs to acknowledge the monitoring and regulating include bricks whose special filler material results in growth program that benefits the export-oriented In any case, we now know that there has been tre- function of the public. Social movements that ques- better heat insulation in homes, and binders that help German economy. Such a program should not repeat mendous mismanagement in many areas over a pe- tion conditions in a constructive and critical manner significantly reduce the amount of toxic heavy metals the mistakes of the past. There has been a debate riod of many years in the large and rapidly expanding exemplify a culture of opportunity in action. Here as present in corrosion-protection products. both in Germany and abroad for quite some time as to Euro economic zone. In some cases, this mismanage- well, it’s always about freedom and limitations. Growth also sometimes means getting rid of cer- whether demand or supply should be strengthened by ment was simply due to negligence, in other cases it Without social acceptance, growth and prosper- tain things and replacing them with something better. the government in difficult economic times. I firmly was the result of random factors, and in some cases it ity cannot be achieved at all or else can’t be sustained. When such innovations are mass produced, they spur believe that this discussion will continue among fu- was even criminal in nature. Nevertheless, even as we The critical attitudes of alliances, movements, and economic growth in a sustainable manner by remov- ture generations of experts. examine the consequences of the global financial cri- NGOs—from Attac to Greenpeace—represent a force ing materials that are inferior, more dangerous, un- We urgently need a common fiscal, economic, and sis of 2009, and learn our lessons from the subsequent that banks and industry need to take seriously. That necessarily complex, and error-prone. In most cases, social policy in the euro zone—one that’s democrat- This article is an government debt crisis, we must still look to the fu- doesn’t mean giving in to every campaign or boycott the new innovations also help conserve natural re- ically sanctioned and safeguarded. Three things are abridged version of a speech made by ture despite all of our frustration. We can only judge demand just for the sake of keeping the peace. How- sources. This is the type of growth that can count on necessary if the current crisis in Europe is to have a Dr. Klaus Engel. The our success here in terms of the number and type of ever, we managers would be well advised to engage broad public acceptance. positive outcome: rapid political and fiscal agreement, complete text appears opportunities we create for ourselves. That’s why we with the people involved in a dialog—and discuss our citizen participation, and the greatest possible eco- in the book Leistung. need a new culture of opportunity! projects as equals in society. The Internet has given Growing out of the European crisis nomic growth. It is time for all of us—especially here Verantwortung. Teilhabe (published in We have a strong and promising platform because the world a sensitive antenna that tells people very In order for the euro to survive and the idea of a strong in Germany—to leave the brakeman’s cab, climb into October by Hoffmann our industry generates a huge number of new ideas clearly whether the growth drivers of the economy Europe to endure, we must realize that we have not the locomotive and work with our partners to get Eu-

und Campe) and has the financial means to invest in their imple- truly seek an honest dialog or instead merely offer FRANK PREUSS PHOTOGRAPHY: yet reached the end of the reform process. To put it rope back on track.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

10_Evonik_02-12_EN 10 05.10.12 15:36 11_Evonik_02-12_EN 11 05.10.12 15:36

GROWTH FORUM 13

EVERY 30 OR 40 YEARS, Western societies launch not stop China and India, which together account for an intense debate about economic growth. Each time some 40 percent of the global population, from ex- Finally Finite? Looking beyond this happens, renowned scholars proclaim we have panding economically. Any attempt to do so would be definitively reached the end of growth. This was the a new form of imperialism. After all, we can hardly say case in the 1930s (Prof. Lord John Maynard Keynes) it was okay for us to become affluent but you’re not al- » Unprofitable Growth and in the 1970s (Prof. Dennis Meadows and the Club lowed to. This is ethically unacceptable. Demand for DR. FRED LUKS of Rome). Now it’s happening again. resources will likely increase further—which means But so far, things have always turned out differently. they will also become more expensive. However, we Why is this so? The answer is that economic growth is will also see an increase in the number of people who mainly linked to growth in knowledge—in other words, develop technologies that conserve resources—in innovative new processes and products that extend the China alone this could amount to more than 50 mil- limits to growth a bit. The reason this occurs is simple: lion people. When the availability of a resource declines to a criti- And that brings us to the question of happiness. We PROF. KARL-HEINZ cal point, it becomes expensive. There is thus a pow- repeatedly hear how growth doesn’t make people hap- PAQUÉ is the Dean of the Faculty of Economics and erful incentive not to use it. Adaptations take time, as pier. But does that mean the Indian government should Management at the Otto von we saw after the oil crises of 1973 and 1980. More- tell its people they shouldn’t even try to become as Guericke University of over, people tend to perceive the process of adapta- affluent as Germans because that would also mean Magdeburg. The interna- tion as a crisis when it occurs in the market economy. becoming just as discontented? That’s not likely to tional economics expert was And rightly so, because crises are necessary. happen because we all know prosperity is generally Finance Minister in Saxony-Anhalt from 2002 to The path to a global ecological balance also in- accompanied by an objective improvement in living 2006. Afterward he led the volves new knowledge and growth. One problem we standards. America’s Declaration of Independence state parliamentary group of face here is that large portions of the globe seem to was correct in proclaiming the “pursuit of happiness” the FDP party until 2008 AN INTENSE DEBATE on growth is currently being conducted. Germany’s be adopting the same approach for achieving greater as a fundamental right. Notice it doesn’t say that hap- parliament has set up a committee to examine the issue. A special council of prosperity that we took in the 19th century. We can piness itself is a right. experts for environmental issues is also addressing the “new growth debate,” and the media has gotten involved in the discussion as well. So does this mean that the growth controversy has now reached mainstream society 40 years after the publication of the famous Club of Rome Report? The answer is no. Paradoxically, all of the criticism of growth is being accompanied by an intense longing for it. Growth remains the sacred cow of politics. One attempt to reconcile “sustainability” and growth is the idea of “sustainable growth”— but that’s not as simple as it sounds. After all, the hope of a “green economy” is based on ignoring problems, a blind belief in technology, and a confusion of terms. Ultimately, only a complete decoupling of economic growth and resource consumption can help reconcile the economy and the environment— and lead to a true reduction of the burden placed on the latter. This goal cannot be achieved with technology and the simultaneous expansion of the economy. The reason? An endless loop of increasing production and rising demand will rely on the continual creation of needs that have DR. FRED LUKS is a sustainability manager in Vienna. not yet been met—and for which products therefore have to be developed. After studying in Hamburg and Hawaii, Luks spent It is this continual creation of demand combined with the technological ex- time working as a researcher at New York University ploitation of resources to satisfy this demand that has led to the problematic and the University of California in Berkeley. He was Growth relationship between growth and sustainability. We’re dealing with expec- also on the staff of the Wuppertal Institute for Climate, tations that cannot be met. This “process of the permanent production of scar- Environment, and Energy for several years city,” as the economist Dr. Caroline Gerschlager puts it, is linked to the fact » Is Necessary and Proper; We Just that “all economic activity exists within the framework of an unending bat- tle against supposed shortages.” A sustainable society must free us from this loop—and not just for the bene- Need To Properly Understand fit of the environment. The economist Prof. Herman Daly has already pointed out the possibility of “uneconomic growth,” which he defines as a situation in which the additional costs of growth exceed the utility created, thereby mak- What It Is ing further growth pointless from an economic perspective. In other words, PROF. KARL-HEINZ PAQUÉ there are economic limits to growth and they can be discerned if you don’t fully ignore environmental aspects and take the utility of growth to society into account. Once you’ve reached that point, you should no longer set eco-

PHOTOGRAPHY: ULLSTEIN BILD, IMAGO ULLSTEIN BILD, PHOTOGRAPHY: nomic growth targets. And the time is now ripe to take this idea seriously.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

12_Evonik_02-12_EN 12 05.10.12 15:36 13_Evonik_02-12_EN 13 09.10.12 17:00 GROWTH FORUM 15

NEOLIBERALISM. The people who re- rich countries offer the type of assistance Sustainability built Europe’s legal, social, and economic that generates development opportunities systems after the Second World War knew for poorer countries, the result will be not very well that economics was not an end in just a moral victory but also an economic » Missionaries Who Preach Water itself. Instead, they thoroughly understood one for the wealthy nations. ... that it was a means of improving people’s I’m aware that continued high unem- lives. Some of the many people who crit- ployment in most industrial nations is caus- but Drink Wine… icize so-called neoliberals might be sur- ing substantial anxiety. In particular, peo- prised to know that Alexander Rüstow, the ple fear that the type of development aid I APL. PROF. DR. NIKO PAECH man who coined the term “neoliberalism,” am referring to could result in more intense PROF. REINHARD wanted to achieve exactly the same things competition on the global market. And that, CARDINAL MARX is the that many of today’s critics of capitalism are in turn, could further endanger jobs in the Archbishop of Munich and Freising. justifiably demanding. ... rich countries. This attitude might seem Marx is also a former college instructor for Christian Social Ethics. Rüstow also used the term “vital pol- selfish but it’s also understandable as far as At present, he is head of the icy.” And here he further defined the term I am concerned, given the hardship unem- committee for social issues at the by saying “vital is that which promotes ployment brings with it. German Bishops’ Conference, as ‘vita humana,’—human life as lived in a hu- However, there is a piece of good news well as President of the Commission mane world. It is our neoliberal opinion that here that frees us from having to deal with of the Bishops' Conferences of the European Community (COMECE). this vital policy is tremendously impor- a moral dilemma. To put it in a nutshell, the The article to the left contains tant, whereas the market is no more than attitude I have just described is ultimately excerpts from Reinhard Marx’ book a means to an end.” based on various incorrect economic Das Kapital: Ein Plädoyer für den ORGANIC DRINKS, fair-trade, eco-electricity, and natural textiles are more As a Catholic Bishop and a Christian assumptions. Menschen (Pattloch Verlag) popular than ever today. Products that make for a clear conscience have be- who is dedicated to social ethics, I can ac- For example, it's simply not the case come a key factor for business success. The supposedly sustainable lifestyle is cept such a “neoliberalism.” I can do so be- that there is only a fixed sum of global cap- booming—one example being special surcharges that are levied on plane trips cause it demands that the economy and eco- ital available for investment. If a German

and paid to so-called CO2 compensation portals. This is no surprise, since the nomic activity be placed on a decidedly invests one hundred thousand euros in an program requires no effort or sacrifice on the part of well-off frequent flyers. ethical foundation. In addition, it places emerging market, you can’t say that this Still, no technology or product can be sustainable per se. All past attempts at the focus of attention firmly on the dignity sum of money has been lost to Germany. decoupling consumption and mobility from the ecological damage they cause of the individual and the equal dignity of all After all, the amount of available capital in- have been failures: The “3-liter car” is a shining symbol of sustainability, for human beings... creases in line with the number of invest- example. However, as long as its owner commutes 200 kilometers a day in it, ment possibilities. It also increases in ac- the benefit to the environment will be at best modest. In fact, any vintage car DEVELOPMENT. If we want to combat cordance with the number of people in that’s driven twice a year and consumes 20 liters of fuel per 100 kilometers poverty around the world, we don’t have developing countries who demand the sort has a better ecological balance sheet. The same applies to people who use so- to give up our prosperity completely; in- of goods and services that are produced by called eco-electricity to power their numerous flatscreens, PCs, and stereos. stead, we need to help the poor become the rich nations. And, of course, there are shoppers who drive to the eco-supermarket in an SUV. prosperous themselves. To do this, we must In other words, you could say that the Our modern multi-option society brings us into conflict with parallel iden- be willing to help poorer countries by pro- really important issue is not how to divide tities, lifestyles, and social practices. As the number of platforms on which one viding them with development aid. In other up an existing cake but rather how to bake can publicly present oneself increases, it becomes easier to perpetuate a sense words, we have to share with them. And if a bigger one. ... DR. NIKO PAECH is an Adjunct of moral acceptance regarding sustainability. Ultimately though, it's the sum of Professor in the Department all activities of each individual and their ecological consequences that counts. of Production and Environment at A government scientific advisory council in Germany estimates that it would Carl von Ossietzky University of probably be possible to achieve the two-degree global temperature reduction Oldenburg. He is also the co-founder target if every person on Earth generated only 2.7 tons of CO emissions each of the Oldenburg Center 2 for Sustainability Economics and year between now and 2050. A roundtrip ticket from Paris to New York itself The Issue Is Not How To Divide Up an

Management, Chairman of generates around half of that emission level per person. The current CO2 bal- the Association for an Ecological ance for Germans is estimated to be 11 tons per year. Economy, and a member of That figure is very likely much higher for the professional sustainability afi- the scientiﬁ c advisory council of Existing Cake but Rather How To cionados who jet from one continent to another to present the same messages » Attac Germany to the same audience—messages that mean little when their bearer is burning that much fuel. Ultimately, these people worsen the problem they’re suppos- Bake a Bigger One edly trying to solve. Sustainability missionaries who preach water but drink REINHARD MARX wine are the cause of the greatest imaginable communication meltdown. Af- ter all, they underline the schizophrenia of a society whose sustainability goals have never been more loudly heralded—and whose daily habits have never been

further from what’s needed to achieve those goals. DDP IMAGES/DAPD HUPPERTZ, AGENDA/WOLFGANG PHOTOGRAPHY:

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

14_Evonik_02-12_EN 14 05.10.12 15:36 15_Evonik_02-12_EN 15 05.10.12 15:36 Solar energy Demand-oriented Supply-oriented The Berlin Wall falls in 1989, In the early 1970s a U.S. manager earned 25 times 1985: Scientists marking the end of discover the hole “real socialism’s” dream as much, on average, as a factory worker. Less than Mind Map: The Dream of Endless Growth in the ozone layer Industrial sites are turned of world domination 30 years later, he was earning 500 times as much at the South Pole into amusement parks The desire for more money, more prosperity, more leisure time, and a better quality of life are the forces driving economic development in all the countries on Earth. But fulfi lling the age-old dream of prosperity has many different facets, because Forest dieback, acid rain Recycling of theory and practice often confl ict. Sometimes the result is a big success; sometimes it’s a major blunder plastic waste In 2007 there were “Economic growth requires people to Civil space travel: 946 billionaires in Keynesian Billions are spent on Anti-bank protests US$, compared to adapt continuously to steadily changing science projects economics 793 in 2006. In the Monetarism ways of life and work.” Free market mid-1980s there were 1973 OECD Report economy only 140 billionaires In 1957 the Sputnik satellite triggers the Moon landing in 1969. In Germany, wages rose space race between the USA and the USSR Global protests against 3,600 percent between the Vietnam War The aerospace industry Creativity and creates new growth 1850 and the early 1970s opportunities sustainability- Blue jeans, originally only Empire State Building Professor Oswald worn for manual work, von Nell-Breuning Dr. Karl Marx Professor John Kenneth become cult objects and a U.S. President Ronald Reagan (1890–1991), oriented The German dream of (1818–1883), the Professor Tomáš Sedlácˇek, Galbraith (1908–2006), global symbol of coolness and his economic policy advisor theologian and prosperity in 1950: Sunday founder of “real socialism” (born in 1977), Czech U.S. economist and advisor Professor Arthur B. Laffer: social scientist economics roast and cake with butter Taipei 101: and communism economist and writer to U.S. President The start of Reaganomics and Vladimir The Marshall Plan in cream frosting “voodoo” economics Symbol of a John F. Kennedy 1948: A U.S. economic Amazon: New Ilyich Lenin The contraceptive Dr. Lord John Maynard Professor Milton new economic Friedrich Engels recovery program for markets as a result of (1870–1924), pill enables women Keynes (1883–1946), Friedman power (1820–1895), Professor Joseph online trade Starbucks founder of the to plan their careers British economist; Western Europe Mao Zedong philosopher and one of Hans Carl von Carlowitz Alois Schumpeter 1973: One out of Gordon Gekko, (1912–2006), coffee goes Soviet Union 3 Keynesian economics (1645–1714), inventor of 2011: Wind Explorer, four people in West libertarian U.S. (1893–1976), Marx’s companions Jane Fonda (born in (1883–1950), The end of stockbroker in an global 4 is named after him the concept of sustainability the fi rst vehicle to cross Germany owns a car, economist Chairman of 1937), actress, 5 Professor Julian economist and colonialism 1987 movie: a continent, propelled 91.4 percent of China’s feminist, and peace L. Simon creativity researcher “Greed is good” almost exclusively by households have a TV, Communist activist (1932–1998), wind energy 50 percent have a 18 Party 6 economist Professor Adam Smith washing machine and (1723–1790), Burj Khalifa: a record player, almost 9 founder of classical Big is beautiful every household has economics and very a refrigerator, and 20 expensive 1 percent have a freezer 12 10 Imports/exports: 17 Factories around 1900: Social Democratic Economic growth Google: Global Party election 11 provision of Industrialization Alternative sources would be impossible poster knowledge and creates jobs of energy: Wind, without the global Care packages division of labor information “Real bring food from solar, and biomass Coca-Cola the USA goes totally Thee ghghettoetto global blaster: The socialism” Government sound machine subsidies lead to a of teenage Bankia: German housing Craze for German underdogs A Spanish Sunfl owers symbolize Germany’s boom in the 1960s Tupperware: Telekom victim of the Rimini, many Germans’ environmental movement dream destination in Innovative sales shares euro crisis the 1950s—more leisure methods for plastic time and higher incomes boost tourism Miner Adolf Hennecke, ICE high-speed train Monopoly: a model for East German 13 Baroness Margaret Thatcher in Germany A new kind Do not pass “Go.” “Heroes of Work” (born in 1925), British Prime Lehman Brothers goes of poverty in bankrupt with junk bonds industrialized Professor Ludwig Erhard Minister and libertarian countries (1897–1977), economic reformer German Economics The Volkswagen Beetle— Minister and Chancellor symbol of mass motorization Women’s work in in postwar Germany factories, ca. 1890 Professor Jeremy Rifkin (born in 1945), U.S. economist and sociologist OPEC oil embargo of 1973: The fi rst oil crisis causes a Sunday driving ban McDonald’s serves U.S. 2 global recession during the 1973 hamburgers throughout the world oil crisis Women clearing Smartphones 7 away rubble after In the 1950s the 1945: Germany rises “Fräuleinwunder” Professorf Joseph Stiglitz helps to polish up out of the ruins Professor Friedrich (born in 1943), U.S. Germany’s image Ferrari: August von Hayek economist, presidential The Beatles: in the USA Vrrroom—the (1899–1992), Professor Walter Eucken Barbie (since Focus on advisor, and chief economist New idols for sound of success Dr. Helmut Schmidt (born in 1918), neo-classical (1891–1950), one 1959): The most Beginning in 1840, of the World Bank young people labor theory German Chancellor, cofounder of the liberalist economist of the fathers of the social successful fashion Santa Claus becomes European Monetary System 15 market economy doll of all time a year-end economic growth booster

Trabant P70 car The home ofﬁ ce Professor Alfred Müller-Armack 16 photographed in Communist Party Strikes for more workplace Industrial robots replace (1901–1978), coiner of the Zwickau in 1955 election poster money and an human workers Professor Karl Schiller (1911–1994), economist, term “social market economy”y eight-hour German Economics Minister (1966–1972), working day 8 and Finance Minister (1971–1972) 14

17-20_InnenKlapper_Evonik_02-12_EN 18-19 08.10.12 12:40 16 GROWTH

3 4 5

18 6 These “outer pages” are 9

1 12 10 directly linked to the foldout 17 11 graphic. To help you ﬁ nd your way around the “Dream

13 of Endless Growth” and Who’s Who: Theorists of Growth the people who have shaped it, 2 each of the economists 7 described here has a number For centuries, scholars have debated about which organizing principle leads to economic growth: 15 16 corresponding to that in the

8 a free market or state control. Here’s an overview of the key theories 14 overleaf diagram

Hans Carl von Carlowitz nism the “invisible hand.” He was convinced that economies and free market economies. As Dr. Karl Marx Prof. Tomáš Sedlácˇek, Prof. Joseph Stiglitz 9 1 4 7 (1645–1714) free markets generate the best results if they are a classical liberalist, Eucken considered the free (1818–1883) (1977) (1943) Senior Mining Director at the Saxon court in not subject to government intervention and in an market to be the basis of a thriving economy: Economic theorist and journalist. According to Economist and author. According to Sedlácˇek, Economist, advisor of US President Bill Clinton, Freiberg. Carlowitz is considered to be the environment where manufacturers, workers, and “The government should neither try to control Marx, the problem with capitalism is that the fate of economies is not determined and chief economist of the World Bank. inventor of the concept of sustainability. In 1713, consumers do not join forces or form monopolies. the economic process nor leave the economy it exploits workers and leads to irreconcilable by mathematically expressible processes, but Stiglitz became famous as a result of his criticism he demanded that people should only fell as to its own devices. Should the government plan class differences. He thought that capitalist by value systems that lie beyond the bounds of the industrialized countries’ globalization Prof. Ludwig Erhard many trees as would grow back as a result of 13 the general framework? Yes. Should the conditions posed an obstacle to human beings’ of mathematical rationality. As a result, policy, in which they only pursued their own (1897–1977) reforestation measures. government plan and control the economic pro- entire existence and prevented them from economic activities can only be effective if interests and did nothing to combat poverty and German Minister of Economics from 1949 cess? No. ...The only kind of economic system exercising their right to self-fulfilment and the they are subject to ethical standards. This moral hunger in developing countries. However, Prof. Julian L. Simon to 1963, Chancellor from 1963 to 1966. in which this is possible is one in which there is 10 free shaping of their environment. Marx code also applies to economic thinking. The Stiglitz is convinced that globalization also im- (1932–1998) Together with Müller-Armack, Erhard imple- unrestricted competition. ... The government therefore advocated a classless society, in which fact that we have forgotten the importance of proves people’s lives in developing countries. Economist. In 1981, Simon declared in his mented the basic principles of Eucken’s must therefore create an appropriate legal frame- all means of production are communally cultural standards and values when it comes book The Ultimate Resource that there were no theory (see below) in the form of political work for the market’s organization—in other Prof. Karl Schiller owned. Here, the productive forces reduce the to the economy is one of the reasons for the 8 natural limits to growth and resources, as measures. He thought the social market words, the rules by which business is conducted.” amount of work needed for the reproduction current debt crisis. (1911–1994) economy would create prosperity for all technological advances could increase them of labor, and the surplus value can be used to Economist, German Minister of Economics through economic growth. Prof. Arthur B. Laffer almost endlessly. He claimed that population 17 meet the needs of all: “From each according to Prof. Lord John Maynard Keynes from 1966 to 1972 and Minister of Finance (1940) 5 growth generates more demand, which, his ability, to each according to his need.” (1883–1946) from 1971 to 1972. Schiller introduced Prof. Alfred Müller-Armack in turn, leads to more economic growth. 14 An economist, Laffer became famous as Mathematician and economist. Keynes was Germany’s Stability and Growth Law, which (1901–1978) advisor to US President Ronald Reagan. During Prof. Jeremy Rifkin 2 one of the most influential economic thinkers of seeks to achieve a balance between the Prof. Joseph Alois Schumpeter Economist and co-founder of Germany’s social a dinner, he once drew a curve of tax rates (1945) 11 the 20th century. As a result of the Great four main economic policy goals (price stability, (1883–1950) market economy after 1945. For him, the and tax income on a napkin to illustrate his Economist, sociologist, and behavioral scientist. Depression that began in 1929, he called for economic growth, balanced international Economist and politician. In his work, The The- market economy complemented social justice. thesis that an optimal tax rate would generate In his bestseller, The End of Work (1995), overall government intervention in economic trade, and full employment). The law’s aim was ory of Economic Development (1911), he showed He wanted the government to take on the tasks maximum income. he showed how the world of work was being processes whenever the capitalist system to enable Germany to overcome its first post- that capitalism depended on entrepreneurial cre- that a competition-based economy could not, dramatically transformed by the use of failed. The aim of these government investments war recession, reduce unemployment, prevent such as mitigating the effects of unemployment. Prof. Milton Friedman ativity. Schumpeter claimed that every innovative 18 cutting-edge technologies. In his book The and interventions should be to mitigate the inflation, and stabilize the economy. Neo- (1912–2006) entrepreneur would initially have a monopoly Age of Access, which appeared in 2000, effects of social ills such as mass unemployment. liberalist thinkers and promoters of free enter- Prof. Friedrich August von when he entered the market. Not until imitators 15 Along with Keynes, Friedman was one of the he described the “access society” in the indus- He stated that the government and the central prise strongly criticized the law’s introduction Hayek (1899–1992) appeared would the creative entrepreneur’s most influential economists of the 20th century. trialized countries. Here, people want to bank should enact financial and monetary of universal taxation of businesses by the position weaken. He considered this interplay Lawyer and political scientist, co-founder of He was a leading advocate of monetarism. have everything right away and also get it, measures that would stimulate economic federal government. between innovation and imitation to be the Austrian School of economics. Hayek was In his bestseller, Capitalism and Freedom (1962), thanks to globalization and the Internet. demand until full employment was reached. the driving force of competition and growth. committed to classical liberalism and advocated he called for a lower rate of government partici- Rifkin warns of the consequences of a total a free market economy. “A social market pation in the overall economy, the introduction of commercialization of our lives and the loss of Prof. John Kenneth Galbraith Prof. Adam Smith 6 12 economy isn’t a market economy, a social con- floating exchange rates, the abolition of govern- our cultural identity. (1908–2006) (1723–1790) stitutional state isn’t a constitutional state, a ment-imposed trade barriers, the elimination of Economist, social critic, and presidential advisor. social conscience isn’t a conscience, social jus- Prof. Oswald von Nell-Breuning Social philosopher and founder of the classic occupational licensing, and cuts to state 3 Galbraith was a Keynesian and a leftist (1890–1991) concept of economics. In his most important tice isn’t justice—and I also fear that social de- welfare programs. He claimed that every econ- liberal US economist. In his best-known work, work, An Inquiry into the Nature and Causes of the mocracy isn’t democracy.” According to Hayek, omy had a “natural rate of unemployment” Catholic theologian, economist, and social The Affluent Society, he showed that capitalism Wealth of Nations of 1776, he explained that the economic cycles are caused by deviations in caused by market imperfections, such as a lack of philosopher. When the German economic produces both private wealth and public best way to promote the common good is through the monetary interest rate from the “natural in- information, obstacles to mobility, the cost system was reorganized after 1950, he poverty. As early as 1958 he warned that unre- free competition. Smith postulated that the terest rate”, in other words, the rate at of adjustments, and demographic change. Mon- advocated that employees be integrated into stricted growth would have dire consequences buyers’ free choices create a balance between which savings and investments are in balance. etary policies aimed at achieving full employment the industrial society and have similar for the environment. the prices of goods and the wages or profits of are sure to fail and can, in the worst case, lead rights to employers. He also demanded that Prof. Walter Eucken the producers. If supply becomes too large, prices 16 to higher inflation. Friedman considered inflation employees participate in a company’s drop and fewer producers survive. This, in turn, (1891–1950) to be a purely monetary phenomenon, which success and that they be involved in decision- causes prices and employee wages to rise once Economist, co-founder of the Freiburg school of central banks could counteract by strictly control- making processes. He made these demands again, motivating additional companies to pro- ordoliberalism, and one of the fathers of the so- ling the money supply. Friedman’s theories because human labor was becoming ILLUSTRATION: PICFOUR. PHOTOGRAPHY: GETTY IMAGES(4), PICTURE ALLIANCE(5), ACTION duce the goods and thus create a renewed balance cial market economy. Eucken made a clear dis- were put into practice by Ronald Reagan and dispensable in many areas of the modern PRESS(2), ULLSTEIN BILD(2), BPK(2), IMAGEBROKER, INTERFOTO, OLIVIER ROLLERI/FEDEPHOTO/STUDIOX, AKG-IMAGES, CORBIS, of supply and demand. Smith called this mecha- tinction between planned/centrally controlled Baroness Margaret Thatcher. automated economy. THINKSTOCK(12), SHUTTERSTOCK(4), NASA(3), ARCHIV(8), PR(23)

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

16_Evonik_02-12_EN 16 05.10.12 15:37 21_Evonik_02-12_EN 21 08.10.12 12:46 22 GROWTH CRITIQUE The Return of the

Dennis Meadows’ book The Limits to Growth was ﬁ rst published Doomsayer 40 years ago. The international bestseller launched a discussion that continues today The book was TEXT DR. BRIGITTE RÖTHLEIN originally published in English in 1972 and later translated into 30 languages

DENNIS MEADOWS is a very experienced public speaker who has been traveling the world for decades to talk about the matter closest to his heart: the limits of growth. He’s no longer satisfied with simple lectures, though; instead he’s developed a game to help participants in his workshops better understand what he’s talking about. The game uses the meta- phor of fishing: Each team secretly develops a strat- American economist and system egy and then writes down how many fish it wants theoretician Prof. Dennis to catch in each round, after which the fish are re- Meadows (pictured here in moved from the “ocean” randomly. The fish popu- the “Climate House” in lation renews itself but does so only slowly. Partici- Bremerhaven) warns that “you can’t have inﬁ nite pants tend to grossly overestimate the resources that growth on a ﬁ nite planet” are available in their ocean. The game therefore almost always comes to a shocking end after just a few rounds because the fish population becomes deci- mated. The ocean has been overfished beyond the point where renewal is possible. That this type of mechanism unfortunately also applies to real life (and not just in terms of fishing) was first demonstrated by Meadows 40 years ago in his report The Limits to Growth. Together with his co-authors (including his first wife, Dr. Donella Meadows), Meadows warned that if the world economy did not change drastically and rapidly, our planet would succumb to a catastrophe by the year 2100 at the latest. He predicted that the downward spiral into the final crisis would begin between 2010 and 2050, claiming the only way to prevent it would be to curb consumption and limit population growth. Working on behalf of the Club of Rome, Meadows and a 16-member team of scientists drew up 13 future scenarios that all led to more or less catastrophic

results. He summarized these scenarios as fol- DDP IMAGES/DAPD PHOTOGRAPHY:

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

22_Evonik_02-12_EN 22 05.10.12 15:41 23_Evonik_02-12_EN 23 05.10.12 15:41 24 GROWTH CRITIQUE GROWTH CRITIQUE 25

Survey: What signiﬁ cance do Meadows’ theories still hold today? “Human Creativity Is Ignored”

Professor Ernst to be maintained, we will need a Alexander Neu- Professor Claudia The team of authors who researched Ulrich von revolution in resource efficiency bacher, Der Kemfert, German and described The Limits to Growth Weizsäcker, and a paradigm shift in the direc- Spiegel magazine Institute for pose for a picture in 1975 (from left): Co-Chair, tion of value-oriented lifestyles The forecasts that Economic Jorgen Randers from Norway; International over the next few decades. were made by Research Jay Forrester, the founder of System Dynamics; the chemist Donella Resource Panel Meadows and his (DIWBerlin) Meadows and her husband, Dennis The limits to growth have been, Sigmar Gabriel, colleagues were always over- I grew up with The Limits to Meadows; co-author William Behrens III are, and always will be a reality. Chairman of the rated. For example, the deple- Growth, the publication that The first major report to the German Social tion scenarios they modeled made Dennis Meadows and the Club of Rome basically acted as Democratic Party were wildly inaccurate. Club of Rome famous. The book a rallying call to everyone and member of According to these scenarios, played a major role in the early who was no longer trapped the Bundestag silver would supposedly be days of the environmental move- in the dream of eternal growth. Dennis Meadows has made the depleted by 1983, tin by 1985, ment. The debate Dennis The Club of Rome recently future part of the political zinc by 1988, petroleum by Meadows triggered with the lows: “If the present growth trends in world pop- Meadows’ theories were met with a great deal of op- received two optimistic new agenda. We should think about 1990, copper by 1991, natural book launched the global discus- ulation, industrialization, pollution, food production, position immediately after the book was published, reports: “Factor Five” and what he says more often. We gas by 1992, tungsten by 1998, sion on sustainability. Its results and resource depletion continue unchanged, the lim- however. Critics claimed his ideas were too pessi- “Blue Economy.” Both show that need to realize that not every- and aluminum by 2001. Even take on even more importance its to growth on this planet will be reached sometime mistic, even defeatist, and that they also ignored key if our technologies were at least thing that grows improves the the world’s gold mines hadn’t today because fossil resources, within the next 100 years.” aspects, most especially the development of technol- five times more efficient and quality of life. We require an been depleted by 1979, as and especially oil, are becoming ogy and the concept of human creativity. He and his elegant, we would be able to re- economic and growth model that Meadows predicted; instead ever scarcer and more expensive. When will the apocalypse be upon us? co-authors were also accused of errors in methodol- tain the current level of growth offers a prosperous life to as they continue to generate Contrary to frequent claims, Meadows was by no means the first person to issue ogy. In addition, the more time that passes since the in prosperity for some time, many people as possible—but substantial revenue today. the book never named a specific The Deutsche such a warning. As far back as 1798, Thomas Mal- book’s publication, the easier it is to test Meadows’ while reducing natural resource without burdening the environ- Moreover, humanity as date for the depletion of fossil Verlags-Anstalt printed thus urgently warned that the Earth was becoming predictions against reality. Indeed, his data has fre- consumption at the same time. ment or future generations. a whole is doing better these fuels; it only pointed out the the ﬁ rst German overpopulated and that this would lead to food short- quently failed to stand up to comparisons with con- In relation to what Meadows has days rather than worse. danger of resource squandering edition in 1972 as ages. Nevertheless, the publication of Meadows’ temporary situations. Still, as the famous physicist Uwe Möller, presented, developing this For example, according to the and environmental pollution. well; many editions alarm in 1972 triggered a nerve due to the times. Prof. Niels Bohr apparently once said: “Prediction former Secretary model and gaining broad social UN, global life expectancy have followed His statements seemed new, or at least packaged is very difficult, especially regarding the future.” In General, The acceptance for it are the major has risen by ten years since The Dr. Johannes in a modern form. In particular, the calculations he this sense, one should accept the fact that Meadows’ Club of Rome challenges of our time. Limits to Growth was first Merck, Chairman made using a computer—an unusual method at that calculations weren’t always right. In any case, he and Thinking about The published, and infant mortality Michael Otto time—made a big impression on the public. The the- his team were prepared to review their predictions Limits to Growth Kerstin Andreae, has declined by nearly two- Foundation for ories presented by Meadows and his co-authors also 20 and 30 years after they were made. Overall, they was a provocation in 1972. For a Deputy Chair- thirds. In fact, the number of Environmental seemed to be confirmed rather quickly when the oil believe the trends they cited have been confirmed long time, people didn’t want to woman of the people suffering from Protection crisis of 1973 broke out. (see Interview on page 26), even if the data has had listen to the alarm that the book Bündnis 90/Die obesity—the current estimate A lot of valuable time has been Just 18 months after its initial publication, The Lim- to be revised. Meadows also points out that his sce- had triggered. Dennis Meadows’ Grünen Parlia- is 1.5 billion— is actually wasted since the report was its to Growth had already been translated into more narios weren’t actually forecasts but instead merely “Update” from 2004 shows how mentary Group greater than the number of issued to the Club of Rome 40 than 25 languages. In addition, the book had been attempts at simulating what would happen if every- the material demands of human- Dennis Meadows’ book The people plagued by chronic years ago—time that could have printed 2.5 million times and had been the subject of thing remained the same. ity are now “overburdening” Limits to Growth was one of the hunger. The latter is put at been spent developing counter- The book was at least 20 television programs and around 50 con- So what happens now? Well, first of all, many de- Mother Earth’s natural capacity most important scientific publi- roughly one billion. measures. Today we know it’s a published in France ferences in countries around the world. “The Club of velopments affecting us today could not have been by a factor of 1.4. In order for cations of the 1970s. Meadows Like all Malthusian prophets of question of “when” rather than at the same time, Rome, whose members and mission were largely un- predicted by Meadows in 1972—for example, the In- the mass markets of the “South” made it clear in the book that doom, the Club of Rome simply “whether” we will reach the limits but was not as popular there as it known at the time, was suddenly viewed as embody- ternet and mobile communication systems, advances to achieve what is generally infinite growth is impossible on a ignored human creativity and of growth. Despite all of our was in Germany ing the global moral-scientific conscience,” says Dr. in mobility and energy concepts, increased network- understood to be an affluent planet with natural limitations. our ability to adapt—not to knowledge, the required trans- Franz-Josef Brüggemeier, Professor of Economics and ing, and the use of renewable energy sources. “Ev- standard of life, more resources We need to recognize ecological mention the creative force of formation process is proceeding Social History at the University of Freiburg. The book’s erything that’s creative cannot be predicted,” Prof. are needed. In fact, we would limits and act in accordance with the market. Ultimately, The Lim- slowly. Governments, industry, success has continued over time, as more than 30 mil- Karl Jaspers once said—and this applies to the fore- need three planets the size them—and this is even more its to Growth tells us very little and leaders in society need lion copies of the original and subsequent updates have casts in Meadows’ report as well. This was also the of Earth to satisfy demand. If hu- important today than it was 40 about its title but a lot about the to get together in order to take PHOTOGRAPHY: RAUNER SPECIAL COLLECTION LIBRARY RAUNER SPECIAL COLLECTION PHOTOGRAPHY: been sold in over 30 languages to date. basis for criticism directed at Meadows at the PICTURE ALLIANCE, PRIVAT THOMAS GEIGER, DPA OLIVER ELTINGER, WEISS/OSTKREUZ, MAURICE DOMINIK BUTZMANN/SPD, HOELTSCHI, 13 PHOTO/SERGE PHOTOGRAPHY: manity is to survive and peace is years ago. lack of imagination of its authors. concerted action.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

24_Evonik_02-12_EN 24 05.10.12 15:41 25_Evonik_02-12_EN 25 05.10.12 15:41 26 GROWTH CRITIQUE GROWTH CRITIQUE 27

“Rather than Being Concerned about Our Planet, We Should Be Worrying about Humanity”

first sustainability conference at The Woodlands, Dennis Meadows, co-author of to the future: If people get smarter, if there are about such issues? A lot of nations have figures and we also continue to believe our Texas, in 1975, by the futurist Herman Kahn, who no wars, if we take a major technological leap accomplished a great deal here. standard of living will improve, or at least stay died in 1983. Kahn and other scientists claimed there the bestselling book The Limits forward. We can’t even solve our problems to- Yes, but people remain the same. We have a the same. What we’re ignoring are the social were no limits to anything, and if one should never- to Growth, explains why climate day, so how are we going to solve them 50 system in the USA, for example, in which it’s elements; instead we continue trying to solve theless arise, the market and technologists would do change cannot be stopped, years from now? considered normal to have a few super rich peo- the problem from a technical point of view. everything in their power to overcome it. Aren’t you underestimating the ability of ple and a large number of poor people, some We’re going to fail if we keep doing this be- despite all our efforts to protect people and the system to develop creative of whom go hungry. As long as we find that ac- cause both population growth and gains in the The quality of growth the environment. solutions to current problems? ceptable, changing the system won’t help at all. standard of living are much higher than the The debate has yet to be settled; each side sticks The book ﬁ rst Our economic and financial system is a tool we That’s because the prevailing values will always savings we can achieve through efficiency im- stubbornly to its point of view. Ultimately, however, appeared in developed, one that reflects our goals and lead to the same result. These values also improvements or the use of alternative energy. Japanese in 1972 Meadows’ true achievement was getting people to values. People generally don’t care about the pact attitudes about climate change, which no That’s why CO2 emissions will continue to rise. rethink generally accepted assumptions. Sustainabil- Evonik Magazine: In your book The Limits future; they’re only concerned with momentary one seems to care about in the USA either. We will not be able to come up with a solution ity, for example, which was declared to be the mea- to Growth, you predicted that key problems. That’s why we’re facing this huge We have seen a change in consciousness in to the climate change problem until we take into sure of all economic activity by the Rio Conference resources would be exhausted or nearly debt crisis. Accumulating debt is exactly the op- Europe, however. account the social factors involved. in 1992, was an unknown term in 1972. Only after depleted by the end of the last century. posite of thinking about the future. Those China, Sweden, Germany, Russia, and the USA Isn’t it possible that groundbreaking

we recognized that our resources are finite did the Since that time, however, many new tech- who create it are basically saying they don’t care all have different social systems—but CO2 technology might still save the Earth? conviction settle in that we need to use them conser- nology fields have been developed what comes next. Moreover, if a lot of peo- emissions are rising in all of those nations. More No, it isn't. Even if we succeed in dramati-

vatively and avoid plundering them. Meadows’ ideas and alternatives discovered or invented. ple don’t care about the future, they’re bound CO2 was emitted in 2011 than the accumulated cally improving energy efficiency, make much thus not only became the initial trigger for green po- Did you make a mistake? to create an economic and financial system that total in human history prior to that—and this greater use of renewables, and restrict con- litical movements; they also changed the culture at Dennis Meadows: What we meant in 1972, destroys it, so to speak. You can tinker with despite the fact that everyone supposedly wants sumption through painful sacrifice, we will still major corporations. Today, for example, there are and what is still the case today, is that there such a system as much as you want—but as long to reduce emissions. have practically no chance of extending the virtually no relevant companies in the chemical or It was published in can be no infinite physical growth on a planet as people’s values don’t change, you’ll not see Over the next few years, we’ll be seeing life of the current system. Oil production will energy sectors that have not made sustainability and China in 1983 by with limited resources. Take food, for exam- any improvement. the impact of renewable energy sources decline by roughly 50 percent over the next resource conservation key components of their cor- the Publishing House ple: Mathematically speaking, the amount of Aren’t you ignoring the impact of environ- and the efficiency gains we’ve made. 20 years, even if we go after oil sand and shale porate governance systems. Sichuanin of the food available per person has declined since the mental movements in many countries Yes, we’re working on the technical aspects, but oil. It’s all happening too quickly. Moreover, People's Republic of In addition, discussions concerning growth are 1990s. Production has increased, but popula- that have changed the way people think we’re completely neglecting population technology is merely an instrument—just like a China now more balanced. The main goal today is not to tion growth has outpaced it. Behind every neo-liberal financial system. As long as our achieve the highest growth rates possible but instead calorie of food we eat, there are ten calories values remain the same as they are now, the tech- to ensure that growth is of high quality. In the ideal of oil or fossil energy sources that are consumed nologies we develop will accommodate them. case, such an approach should focus on individuals, for food production, transport, storage, prepa- “As long as people’s values don’t change, So how can humanity get out of this their idea of happiness, and their ability to take re- ration, and disposal. These fossil fuel reserves miserable situation? sponsibility for coming generations. The Limits to are being depleted—and this will continue you’ll not see any improvement” We need to change our nature because basically Growth takes all of these aspects into account. In a regardless of whether we exploit new shale oil we’re still programmed exactly the way we 2003 interview, Meadows indicated his satisfaction and natural gas deposits. We’re already were 10,000 years ago. When one of our with the new ways of thinking triggered by his work: past the point of peak oil and peak gas. And the ancestors was attacked by a tiger, he didn’t think “If you want a label that fits me absolutely, you could more oil reserves that are depleted, the about the future—he only thought about his call me an apostle of qualitative growth or an oppo- more expensive food will become. This will put own survival at that moment. My fear is that our nent of stupid growth.” The 30-year update huge pressure on the entire system. genes make us unequipped to deal with long- was published in According to your model, growth of the term issues like climate change, and as long as 2007 in Russia by Akademkniga Earth’s population, which is expected we fail to learn to do so, we will never come SUMMARY Publishing House to reach around 9.5 billion in 2050, will up with a way to address all of these problems. •The report The Limits to Growth was ﬁ rst presented in 1972 continue for another 30 to 40 years People always say we need to save our planet. by the Club of Rome, a forum of scientists and business even if food production stagnates. But that’s not true: Our planet is perfectly able leaders. It immediately caused a huge stir Yes, and that means there are going to be a to save itself. It has always done so. Sometimes •The study’s authors warned that continuing on the path of huge number of extremely poor people—well it took millions of years, but in the end the Earth consistent and rapid growth would lead to a crisis for humanity over half the global population. The volume did what it had to. In other words, rather than •Despite massive criticism of its claims, the book has had a of all the resources we’re familiar with will being concerned about our planet, we should

major impact on economics and society ever since decline. There are too many “ifs” when it comes RUDEL IMAGO/HORST PHOTOGRAPHY: be worrying about humanity.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

26_Evonik_02-12_EN 26 05.10.12 15:41 27_Evonik_02-12_EN 27 05.10.12 15:41 GROWTH MODERNIZATION 29 Phoenix from the Ashes The US auto industry is reinventing itself—and becoming greener in the process. Smaller, more effi cient models are DELIVERY BOTTLENECKS in the US automobile in- taking over the market. Infl uenced by European role dustry? Three years ago, that would have sounded like models, the sector has embraced energy-effi cient mobility a bad joke, but today it has almost become a reality. Be- TEXT CHRISTINE MATTAUCH cause of high demand, long waiting times are threat- ening to affect Ford customers. Managers have been quick to respond—for example, they cut the traditional summer holiday in half at 13 plants in the USA. Around 40,000 additional cars were manufactured. “The need to increase production at our plants is a problem that we are glad to have,” chuckles Jim Tetreault, Vice Pres- ident North America Manufacturing. And Ford isn’t the only automaker that’s back on track for growth. In the spring of 2009, General Motors and Chrysler both had to declare insolvency. Since then, however, they have recovered so quickly that even industry insiders are amazed. Detroit’s “Big Three” are making profits again. Last year, all three increased their market shares—something that hasn't happened since 1988. Now they are spending money on new capacity. Ford has invested some US$600 million in a plant in Louisville, Kentucky, where the new Escape has been rolling off the assembly line since the summer. Chrys- ler hired 1,800 people in Belvidere, Illinois. One of their tasks is to assemble the new Dodge Dart. And GM, number one in the sector, promised to invest $2 billion in its US plants and create 4,000 additional jobs. It is also expanding capacity in Mexico, where the Chevrolet Trax will be manufactured for the world market. Pressure to innovate from the government It seems that the stolid old companies have finally made it into the 21st century. “They’re producing the best cars they’ve ever made,” says Michelle Krebs, an analyst for the automobile research company Edmunds.com. But they haven’t secured their future just yet. The biggest challenge facing the sector is the transition to environmentally friendly cars. For the big three in De- troit, fuel consumption was a marginal issue until very recently. Now they have to play catch-up. At the end of August, President Barack Obama made ambitious standards for reducing fuel consumption compulsory— with the agreement of the industry. For a long time, Detroit concentrated on producing big heavy cars that would easily make money on the US market. “High-quality, efficient small cars—automakers couldn’t earn anything with those. But that has

PHOTOGRAPHY: 2012 FORD MOTOR COMPANY 2012 FORD MOTOR PHOTOGRAPHY: changed,” says Bruce Belzowski of the University of Ford employee Eddie Coleman building the new “Escape” on the assembly line in Louisville. The automaker spent $600 million to renovate the facility and created 1,800 new jobs. An additional 1,300 are planned Michigan Transportation Research Institute. The

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

28_Evonik_02-12_EN 28 05.10.12 15:42 29_Evonik_02-12_EN 29 05.10.12 15:42 30 GROWTH MODERNIZATION GROWTH MODERNIZATION 31

America aims to once again be at the forefront of the next revolution

fact that the government is driving innovation is tegrating European ideas according to industry experts. slightly ironic. American cars are, after all, the epit- The Ford Focus, which is already successful in the US is ome of freedom and independence for many people. essentially a European development. The energy-effi- But the Obama administration already played a cen- cient “Ecoboost” engine has roots that span the Atlan- tral role during the economic crisis. It guided GM and tic, and the 1.6 and two-liter versions will be manufac- Chrysler through restructuring, made credit avail- tured in Spain and Great Britain. Chrysler, on the other able, reduced the outstanding debt and lowered la- hand, is profiting from its parent company Fiat. The new bor costs. The number of automobiles sold in the US Dodge Dart, a racy compact chalked full of technology, is actually climbed to almost 13 million in 2011. This based on the platform of the Alfa Romeo Giulietta. This year, that number could reach 14 million and in 2016 is exactly the right way forward, says auto expert Krebs. it could rise to 16 million according to the Center for “Standardize components that consumers don’t see, and Automotive Research (CAR) in Ann Arbor, Michigan. offer them choices in design and accessories instead.” According to a law, which President Obama has Tastes are becoming more similar internationally any- called “historic,” by 2025 American motorists should way. “The world is getting smaller and smaller, and for be getting 54.5 miles per gallon on average. That is the the most part people want the same things.” equivalent of 4.3 liters per 100 kilometers, or about 50 Of course, national differences remain. SUVs and percent less consumption than today. The new stan- pick-ups are still popular in the US, accounting for about dards apply to small cars as well as to light pick-ups. half of the market. It won’t be easy for the big three to There are special regulations for heavy trucks. make these gas-guzzlers more economical. Densely- populated and rapidly growing Asian cities, on the other Americans pay attention to fuel consumption hand, are the ideal market for small electric vehicles, The industry probably went along with this goal be- like those GM presented at the Beijing auto show this cause higher fuel prices are considered to be inevita- spring. Prototypes of a futuristic two-seater that looks ble. Drivers of small cars are already citing fuel cost like a cross between an egg and a bumper-car will hit savings as the main reason for their purchase, accord- China's roads in the next few years. The industry giant ing to a Ford survey conducted last year. Fuel economy cooperated with the small cult firm Segway during de- is a key consideration when purchasing a mid-size car velopment—a collaboration that shows how much things as well. Sales in both segments are experiencing dou- have changed for the number one company in the sector. ble digit growth in the US market, while the demand Meanwhile, automakers are preparing for intelligent, for heavier full-size automobiles is shrinking drasti- self-driving vehicles. A study conducted by CAR and the cally. Sales of larger cars were around 90 percent lower business consulting firm KPMG predicts that by 2025 in the first six months of 2012 compared to 2011. these cars will be driving on US roads. Google is already Detroit’s product range is changing radically. This experimenting with robotic cars in California. The com- year GM presented the Chevrolet Spark—the first mini- panies in Detroit have just managed to get themselves car in its history—in response to the Fiat 500, which the up-to-date. They have to be careful not to miss the boat Italian company is selling in the US through its subsid- again. Ford realized that, and just about doubled its bud- iary Chrysler. The new Cadillac ATS, designed to com- get for research on intelligent vehicles last year. pete with the BMW 3 Series, is also a reflection of the times. “For the first time, we’ve got a model that isn’t bigger and heavier than its competitors,” says Mark Re- SUMMARY uss, President of General Motors North America. And • The big US automobile companies have gotten back on Ford is boasting that it will bring eight models onto the track for growth through the development of new, market this year that use less than six liters for 100 kilo- compact models. meters—that’s over 39 miles per gallon. Cars are becom- • The decisive stimuli have come from the US government, ing lighter and more aerodynamic. Their engines also which has recently even set strict fuel economy standards shut off when the cars stop for several seconds. for the automakers in Detroit. Technology from Europe is helping with this new ori- • The pressure to innovate remains: new market players Sergio Marchionne, Chairman and CEO of the Chrysler Group, at a press conference in the production plant in Belvidere, Illinois. Chrysler announced that

PHOTOGRAPHY: BLOOMBERG VIA GETTY BLOOMBERG IMAGES PHOTOGRAPHY: entation. Ford has made particularly good progress in- are appearing as part of the trend toward electric cars. it would be hiring an additional 1,800 workers. The assembly of the new Dodge Dart alone will create 500 new jobs

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

30_Evonik_02-12_EN 30 05.10.12 15:42 31_Evonik_02-12_EN 31 05.10.12 15:42 32_Evonik_02-12_EN 32

PHOTOGRAPHY: MAURITIUS IMAGES/ALAMY, MARCUS BENSMANN GROWTH RAW MATERIALS 32 The Boom Years safeguard thefuture ofthecountry Kazakhstan thereforeKazakhstan plansto Economic growth isn’t easy to manage. Large oilreserves andvaluable MARCUSTEXT BENSMANN utilize international and expertise and its17millioninhabitants? . Buthow inKazakhstan prosperity miracle andnever-before-seen raw materials have created an economic partnerships to developpartnerships new can thepetro-dollarscan beusedto growth sectors

Showplace ofgrowth Astana, the capital: thecapital: Astana, and prosperity Oil pumping on the Kazakh steppe: Oil pumpingonthe Kazakhsteppe: untapped reserves willpourmoney untapped reserves years to come New pipelinesandpreviously into government formany coffers 05.10.12 15:43 33_Evonik_02-12_EN 33 GROWTH RAW MATERIALS Evonik Magazine 2 Magazine Evonik 05.10.12 15:44 | 2012 33 34 GROWTH RAW MATERIALS GROWTH RAW MATERIALS 35

Russia

Astana

Kazakhstan Russia Newcomer in the East Uzbekistan China Kazakhstan’s neighbors are globally established suppliers of raw materials. But as China rises, it is increasingly using its rare earths for its own computer industry

MEHMAN SHOKIROV IS A BOATSWAIN who port of Novorossiysk on the shore of the Black Sea in used to sail the world’s oceans, but today he’s just talk- southern Russia. ing a trip on the Caspian Sea. The Azerbaijani oil tanker the 56-year-old sailor has hired on with—the Shusha— Strategies for the post-oil era travels back and forth between Kazakhstan and Azer- The accompanying rise in oil prices benefited other baijan. The salty inland sea is still the only route for ship- Kazakh oilfields as well. New petroleum transport ping oil from Central Asia past Russia and into Europe. routes were established, such as the pipeline com- The Shusha moves 11,000 tons of oil from the Tengiz pleted by the Chinese from the Kumkol field in the field on the Kazakh coast to the west each time it sails. heart of Kazakhstan straight into China in 2005. The With total reserves of around one billion tons, the Ten- other end of that transport route runs to the Caspian giz oilfield is one of the biggest to have been exploited Sea and was finished in 2009. It is there, not too far in recent years. The black gold it gives up also triggered from Tengiz, that another new oilfield is waiting to the first surge of economic growth in the former Soviet be tapped. Republic after it became independent. The Kashagan oilfield, which is even bigger than After the Soviet Union collapsed in the 1990s and Tengiz, is located around 100 kilometers off the Cas- Kazakhstan declared its independence, the new nation pian coast and is scheduled to go into operation either initially experienced a major economic crisis. In partic- this year or in 2013. The existing pipelines will be un- ular, energy was scarce and power outages were com- able to handle the amount of oil that will then be pro- mon, even in the capital at that time, Almaty. Oil prices duced, so the Shusha and her sister ships in the Kazakh had fallen and the fields that had been put into opera- and Azerbaijani fleet will soon have a lot of sailing to do. tion during the Soviet era did not produce enough to Nazarbayev used the profits from Tengiz—the first stave off economic collapse. What’s more, all the pipe- economic miracle—to build a flashy new capital, Astana. lines in place led only to Russia. Now, however, he wants to harness the second burst The U.S. oil company Chevron subsequently of growth—to be generated by the Kashagan field—to signed an agreement with the Kazakh government make his country with its 17 million inhabitants one under President Nursultan Nazarbayev that would al- of the richest nations on earth. Instead of constructing low a consortium to assume control of opening the shiny magnificent buildings, Nazarbayev has decided Tengiz oilfield. The consortium increased the annual to focus on international expertise. A few years ago he production from one million to more than 25 million came up with the idea of holding international confer- tons (2011) in less than two decades—and during this ences in Astana in order to transform the city into a ma- time the money began pouring in. Billions of U.S. dol- jor think tank that not only promotes Kazakh economic lars subsequently began filling the coffers of the Ka- development but also creates new global solutions for zakh government in 2001 after the completion of a the world’s problems. To this end, he invited current Workers in the oilﬁ elds on the steppe: Jobs for rugged men—in PHOTOGRAPHY: MARCUS BENSMANN; GRAPHIC: PICFOUR MARCUS PHOTOGRAPHY: new pipeline that transported oil from Tengiz to the and former heads of government, scientists, and top temperatures of up to 50 °C in summer and as low as -30 °C with cutting winds in winter Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

34_Evonik_02-12_EN 34 05.10.12 15:44 35_Evonik_02-12_EN 35 05.10.12 15:44 GROWTH PRODUCTS 37

Who’d Have Thought… An El Dorado that coffee in capsules or miniature lights could revolutionize old traditional products and ignite what is absolutely phenomenal growth in their markets. of rare earth Here we present ﬁ ve of these surprise success stories metals TEXT CHRISTIAN TRÖSTER ILLUSTRATIONS DANIEL HOPP An American production complex near the Caspian Sea: Raw materials partnerships with foreign companies will also bring know-how into Kazakhstan

business leaders to the Astana Economic Forum in rare metal deposits, and the Astana Club of Nobel Lau- 2008. These conferences led in 2011 to the creation of reates to prepare Kazakhstan for the post-oil age. The the Astana Club of Nobel Laureates. The club now has fast money from oil has made many people rich and cre- 14 members, including Dr. Robert Aumann, who was ated a free-spending middle class, especially in the cities. awarded a Nobel Prize in 2005 for his work on game- Iskender, a 32-year-old lawyer who lives in Almaty, got a theory analysis. The purpose of bringing together econ- job with a Chinese oil company after he graduated from omists and chemists in the club is to ensure that Kazakh- college. A few years later he bought an apartment and a stan can “effectively utilize the investment and financial car. “My next plan is to buy a house in the mountains for resources” that will accumulate in the boom years. me and my wife,” he says. But although oil has brought Economic activity in Kazakhstan has long since prosperity to Kazakhstan, it has also led to very difficult moved beyond oil. Geologists are firmly convinced working conditions for many of the country’s citizens. that the seemingly endless steppe harbors more trea- The Uzenmunaigas oilfield has been operating since sures. The region is an El Dorado for rare earth com- the 1960s. It contains more than 5,000 pumps that suck pounds—i.e. the metals without which we would have no the black gold up from a depth of 1,500 meters. Tem- smartphones or flatscreens today. If the right approach peratures here can reach 50 °C in the summer and drop is taken, Kazakhstan could become one of the world’s to -30 °C in the winter. “When the wind blows, it’s like a Name: Nespresso | Date of birth: 1970 | Market debut: 1986 | Potential for growth from 2010 to 2015: +47 percent leading suppliers of these coveted raw materials. thousand knives cutting your face,” says Erkin, 23, who comes from an oil-worker family and has worked here A free-spending middle class for six years. “The summers are even worse,” he adds. Dr. Albert Rau, First Deputy Minister of Industry and That’s because there’s no water; it has to be shipped in The coffee capsule: A license to print money New Technologies, wants to use these resources to ini- from the Volga River over a thousand kilometers away. tiate a second wave of industrialization. “We want to Erkin works in a brigade that drives from pump to pump THE GERMAN GRANDMA brewed her coffee with a hand fil- But even such an innovative device needs time to make an im- not only supply raw materials but also be a partner in to change pipes. Sometimes they cross paths with camels ter, the Italian “mamma” with an espresso maker on the stove. pact. The system was already invented in 1970, but didn’t go on their extraction and processing,” says Rau as he stands or horses. Of his two children, Erkin says, "I don’t want Then came Nestlé, and created a market with its aluminum cap- the market until an unbelievable 16 years later. It then took an- in an office with a breathtaking view of the city and the them to work here when they grow up." sules that had never existed before: the sale of coffee by the por- other five years for the system to be a financial success. endless steppe beyond. Rau, whose family is from Ger- tion. That earned the company a tidy profit margin. In Germany, Today, capsules and pods are the engines of growth in the many, was a big proponent of the German-Kazakh raw at 36 to 39 cents, a Nespresso capsule costs three to four times as coffee market, which is teeming with Nespresso competitors, materials partnership agreement that was signed in Ber- SUMMARY much as a regular portion of espresso. The Nespresso machine, including ex-Nespresso Manager Jean-Paul Gaillard. He left the lin during a state visit by Nazarbayev in February 2012. • Huge petroleum reserves and new oil discoveries are which is required in order to use the capsules and which must be company on not so friendly terms in 1998 and in 2008 founded The agreement gives German companies access to raw generating rapid economic growth in Kazakhstan purchased separately by the consumer, has played a key role in Ethical Coffee as an alternative brand that is less expensive. Eth- materials. In return, the Germans will provide their ex- • The wealth of capital and raw materials will safeguard the the success story. Worldwide in 2011, Nestlé sold its capsules at ical’s bio-degradable capsules are intended to take advantage of pertise in building and modernizing industrial facilities. country’s future and promote further industrialization a rate of 12,300 per minute—that’s equivalent to around 6.5 bil- what is regarded as the giant competitor’s Achilles heel—the alu- The country’s long-term development strategy • International forums and Kazakhstan’s Club of Nobel lion per year. The result was sales of 3.2 billion Swiss francs. For minum waste that each cup of espresso produces is a problem

PHOTOGRAPHY: PANOS PICTURES/VISUM PANOS PHOTOGRAPHY: also includes measures to utilize the huge oil reserves, Laureates are developing strategies for the post-oil era ten years Nespresso sales had a growth rate in the double digits. for many consumers.

Evonik Magazine 2 | 2012 Evonik Magazine 2| 2012

36_Evonik_02-12_EN 36 05.10.12 15:44 37_Evonik_02-12_EN 37 08.10.12 12:34 38 GROWTH PRODUCTS

Electric bikes: Powerful performers

DOPING FOR BICYCLES: Anyone cycling up a ment of more powerful batteries. The power packs steep mountain slope who is overtaken by a retiree can provide assistance for up to 80 kilometers on a trip. racing uphill on his or her bike, need no longer worry The leading producer of these bikes is China, where about being out of shape. That’s because an increas- 22 million units were manufactured in 2009, the ma- ing number of people, among them many seniors, en- jority of those being intended for the domestic mar- joy riding pedelecs—bicycles that assist pedaling using ket. At this point in time, 120 million electro-bikes are an electric motor. The motor is usually located in the on the road between Peking and Guangzhou. Across axle, but newer models are expected to have a motor the ocean, in the land of low gas prices, there are cur- amid-ships. The bikes with the built in tailwind are rently around 200,000 electro-bikes on the roads of bringing growth to the mobility market as are elec- the USA. By contrast, in Europe and Asia growth is in- tric bikes, whose motor assist can also be used with- fluencing existing market conditions. Bicycle manu- out pedal movement. factures are now competing with automobile produc- In Europe, sales have tripled inside three years to ers and manufacturers of electrical home appliances 700,000 units in 2010, thanks mostly to the develop- and lawn mowers.

Name: NFC chip | Potential for growth: Over 20 million people in the U.K. today, in Germany more than 70 million by 2015

Cashless payment: Virtual billfold

HOW EASY it is to make “proximity” payments can stations and supermarkets will probably soon get in be experienced in London. The Oyster Card was in- on the act. Already, Visa and Mastercard have posi- troduced there in 2003 by public transportation oper- tioned themselves with their Paywave and PayPass ators and since then over 20 million cards have been systems and the German Sparkasse banks are launch- distributed. The user just whisks his or her card past a ing Girogo—all driven by Apple, Google, and Micro- terminal, and the cost is automatically deducted from soft. Most market players expect that the technology the card. The search for small change is a thing of the will find its way into cell phones in the medium term, past, waiting times are cut, and if a person rides sev- and that money will be transferred via phone bills and eral times in a day, the less expensive day ticket price SIM cards. is charged. The technology used is called Near Field Many mobile phone manufacturers have already Communications, (NFC) and is good for wireless data announced NFC capability. Google has said that it in- transfer across a distance of up to four centimeters. tends to launch the Google Wallet, an app that com- Because the system has worked so well for sub- bines geographical data, payment information and ad- Name: Pedelec/electric bike | Growth prediction: from 200,000 bikes in 2010 to over one million in Germany ways and busses, vending machines, post offices, gas vertisements, which will be free for users.

Evonik Magazine 2 | 2012 Evonik Magazine 2| 2012

38_Evonik_02-12_EN 38 08.10.12 15:44 39_Evonik_02-12_EN 39 08.10.12 12:34 40 GROWTH PRODUCTS

LED lamps: Small but efficient

THE MARKET FOR LEDS is growing at the speed of away the most efficient light sources. As semiconduc- light. In 2010 a British study predicted that the mar- tors that give off light when electricity flows through ket would more than double within three years to $17 them, they are small, just about indestructible, and re- billion. Philips Lighting, one of the biggest suppliers quire little maintenance. They can work for up to 11 in the market, assumes that in ten years, 70 percent years without interruption, after which they can be of all light sources will be LEDs. As a result, so-called disposed of in an environmentally friendly way. After energy-saving lamps (compact fluorescents) will be all, they don’t contain mercury—in contrast to compact consigned to the museum—just like oil lamps and in- fluorescent lamps. The only barrier to an even more candescent bulbs before them. The advance of LEDs is explosive takeover of the market is the price. Today an leading to the digitalization of lighting—and the trans- LED with the illuminating power of a 60W incandes- formation of an entire industry. The atmosphere in cit- cent bulb costs between €30 and €60. The price will ies, offices and apartments will all improve as a result. have to be reduced by a factor of ten—a feat that many The reasons for the success are clear. LEDs are far and other semiconductor markets have achieved.

Name: App | Potential for growth: from 0 in 2007 to almost $57 billion by 2015 worldwide. In Germany app sales reached a total of €210 million in 2011

Apps: Smart business drivers

DEPENDING ON WHAT YOU WANT, they can With a certain delight, the New York Times docu- transform a smartphone into a piano, a weather sta- mented the holiday season trade for 2011, in which tion, a toy or a newspaper to name just a few of their 6.8 million smartphones and tablet computers were capabilities. Apps—little programs for smartphones used for the first time. Within hours of the traditional and tablet computers—have created a growth market Christmas Eve gift-giving, the number of app down- such as the world has seldom seen. Starting from zero loads skyrocketed. Because people had time to play in 2007, the year that the first iPhone went on the mar- with their new gadgets, 392 million apps were down- ket, apps are predicted to generate $56.6 billion in loaded giving their vendors the gift of record sales. sales by 2015. During the Christmas holidays Apple reached its This forecast is supported by real figures. Alone in 10 billionth app download for 2011, while compet- Germany a good 962 million apps were loaded onto itor Android reached its 10 billionth in total. Only a smart devices in 2011. That represents growth of 249 few of the little programs cost anything up front, but percent compared with 2010. Sales climbed to €210 income from sales and advertising has so far gener- million—an increase of 123 percent over the previ- ated $3 billion in revenues for vendors in the Apple Name: LED lamps | Potential for growth: The total surface area covered by LEDs will increase from 22.5 billion mm2 in 2012 to 80 billion mm2 in 2018 ous year. App Store alone.

Evonik Magazine 2 | 2012 Evonik Magazine 2| 2012

40_Evonik_02-12_EN 40 08.10.12 12:35 41_Evonik_02-12_EN 41 08.10.12 12:35 42 GROWTH CREATIVITY

EVEN IF YOU’RE LEFT WITH NOTHING, you still have your creativity. It can’t be gambled away or taken away. So it's no surprise that creativity is at the heart of a popular new theory: that the power of creativity can be used to overcome the economic slump. The hope is that a renewed bailout consisting of fresh ideas will help the economy to recover. The solution sounds simple: harnessing our mental strength to solve the economic crisis affecting Europe. According to Professor Adam Grant from the Wharton School at the University of Pennsylvania, to unleash our inner creativity we must first switch our point of view. “Creativity is the currency of societal progress and the hallmark of success in organizations. To innovate, adapt, excel, and survive, organizations depend on their employees' creativity,” Grant explains. In this regard, organizations are very similar to countries. In both cases, creativity can drive economic change. Companies such as Michelin, Apple, and IBM are examples of a new corporate approach that is moving beyond selling products to offering creative solutions. Peter Economides wants Before embarking on his academic career, Adam to rebuild Greece as a Grant worked as a professional magician. As a result, he brand: Ginetai will knows how to attract attention and transfix an audience. support creative startups From his stage performances, Grant knows that the key In the end, only creativity can and pave the way to creative success lies in our own social networks, and toward a more promis- lead to growth—it’s a re- ing future for the he has demonstrated this in several studies. debt-ridden country If you carefully analyze the needs of people within source that doesn’t cost any- and beyond your social network, you’ll find that the most well-connected individuals are also the most creative. thing and is accessible This is because new ideas can usually be traced to ex- to everyone. This applies not ternal rather than inner impulses. The more people you only to companies but know, the more impulses you’ll receive. However, this also means that a crisis can have serious effects. also to countries and regions, If you lose your job, for example, you become iso- according to visionaries lated and can’t afford to go out and maintain your so- around the world such as the Greek entrepreneur Peter Economides and the American professor Dr. Adam Grant PHOTOGRAPHY: NIKOS PILOS, HELLINIKON SA HELLINIKON PILOS, NIKOS PHOTOGRAPHY: TEXT JAKOB VICARI Growth from Zero—the Economics of Creativity

Evonik Magazine 2 | 2012

42_Evonik_02-12_EN 42 05.10.12 15:53 43_Evonik_02-12_EN 43 05.10.12 15:53 44 GROWTH CREATIVITY GROWTH CREATIVITY 45

Creativity has become an economic force

cial contacts any more. If you’re mainly concerned examples he gives is the invention of the plow, a creative tive side of the current economic crisis. He points out that now,” Economides told the magazine Der Spiegel. “We with your own survival, you think of yourself first and idea that immediately revolutionized medieval agricul- every previous crisis has cleared away the old and made need crazy types who will think outside of the box.” He others second. That’s why, according to Grant, the im- ture. Whenever farmers used the new invention instead way for the new. He believes that we are now experienc- believes that in order to focus on growth the Greeks need age of the lone creative genius who changes the world is of hoes and spades to till the earth, yields increased dra- ing one of the most pivotal moments in American eco- to start thinking creatively first. “The only thing we have misguided. “If you concentrate on other people, you’ll be matically. Using numerous historical examples, Florida’s nomic history since the Great Depression of 1929. Ac- is our soft power,” says Economides. more creative,” he says. study demonstrates that creativity has always thrived in cording to his current predictions, industrial cities will Creativity is a force that comes out of nowhere and The Rise of the Creative Class is the title of a pioneer- periods of social and economic upheaval, because peo- shrink and centers of creativity will grow in the future. changes the world. From advertising to tourism, from Google’s Swiss ing study published by the American economist Richard ple are forced to find new solutions. At first Florida was software development to design, from architecture to headquarters in Florida in 2002 that outlines how creativity has become a criticized for his theories. However, neither the collapse Inventors becoming entrepreneurs entertainment—creativity influences how we think, how Zurich inspires driving economic force. Florida’s main thesis is that a so- of the New Economy nor the effects of the 9/11 attacks One of the most creative spots on earth, Silicon Valley, we work, and how we build. employees with colorful pods, ciety’s creative class is a key force driving innovation and have prevented the developments he predicted. owes its success to various crises. Perhaps the most One model for the Greek entrepreneur is an initia- cow-print cushions, the economic growth of countries. According to him, this In fact, the rise of Google and Facebook have only important one was the personal crisis of William B. tive called Start-Up Chile, which awards US$40,000 to and birch trunks class has always promoted innovation. One of the earliest confirmed how right he was. Florida also sees the posi- Shockley, a professor who helped invent the tran- creative professionals who have a promising business sistor, the building block of the information age, and later won the Nobel Prize in physics. In order to experiment with silicon, he founded a company in what later became known as Silicon Valley. The project was sluggish, and Shockley took his frustration out on his employees. As a result, eight of his most talented employees left. This miniature crisis could easily have led to the demise of the area’s silicon technology. How- ever, the former employees decided to stay there, pool their ideas, and establish the Fairchild Semiconductor company, which became a driving force in the booming semiconductor business and ultimately a symbol of modern America. But can such effects be planned, perhaps even for an entire country? Yes, says a marketing executive from Greece, of all places. His name, appropriately, is Economides. This cos- mopolitan advertising executive is the founder of the Gi- netai initiative, which is based in Athens. As an advertiser, Economides has advised Apple and Nescafé on creative solutions. Now he’s establishing a new creative center on the site of the old Ellinikon airport in Athens. The initiative has already attracted interest from investors such as Microsoft. Economides is well aware that Greece has no industrial economy—construction machinery and smartphones probably won’t ever be built there—so why not New impulses for new focus on new energy resources and information tech- ideas: The management nology? Economides wants to transform Greece into a expert Professor Adam Grant has shown brand of ideas. He intends to build on the brand’s rich in his studies that traditions: the country’s beaches, its mythology, the sea, people who network and the birth of democracy. tend to be more His new project Ginetai—the name means “it’s creative achievable”—promises to open up a creative future for the country. In essence, it’s an idea factory for creative professionals who can apply to participate. “Our country PHOTOGRAPHY: GOOGLE; MICHAEL KAMBER PHOTOGRAPHY: is going down the drain, so we have to start somewhere MICHAEL KAMBER PHOTOGRAPHY:

Evonik Magazine 2 | 2012

44_Evonik_02-12_EN 44 05.10.12 15:53 45_Evonik_02-12_EN 45 05.10.12 15:53 46 GROWTH CREATIVITY GROWTH MOBILITY 47

Tricks for creative thinking Ready for Takeoff Unlike Europe’s airlines, which are making massive losses, China’s aviation industry is experiencing one boom after the other.

PHOTOGRAPHY: START-UP CHILE; APPLE START-UP PHOTOGRAPHY: Apple co-founder and creative genius Steve plan and are willing to move to Santiago. As a result, One well-known example is Steve Jobs, a creative genius Wozniak is pictured here in 2012 with his even young German entrepreneurs are moving to South with plenty of charm—however, even his supporters con- team at Start-Up America to put their creative ideas into practice. One of ceded that his managerial style was a disaster. He would Chile and in 1976 them is Tobias Lorenz, who has started an online lan- not hesitate to belittle his employees and call them “bo- with Steve Jobs guage school called Glovico.org. To make the move, he zos.” Yet the power of his ideas smoothed over these de- quit his previous job and now regularly writes about his ficiencies—and allowed Apple to grow. experiences on his blog. “I now hope to successfully com- Another challenge to creativity lies in the fact that plete the next steps in the process, and then approach and many people have a deep-seated suspicion of “creative attract social investors,” he writes. solutions.” Companies often have good reason to be However, this doesn’t mean that creativity can be skeptical, because if creativity influences productivity, bought. In fact, money can actually limit creativity. Ac- then traditional structures can be called into question. On cloud nine: cording to research conducted by neuroscientists over The foundations of a well-organized company—for ex- Just like the Chinese 50 years ago, a regular salary and high bonuses can ample, order and hierarchies, tradition and experience— economy, the country’s aviation lead to a narrow outlook—the exact opposite of what is can suddenly be questioned. What’s more, companies industry is booming needed in order to switch perspectives. This was dem- might suddenly have to tolerate seemingly useless re- onstrated by Dr. Sam Glucksberg of Princeton Univer- sults. And why would they want to do that? sity in his famous candleholder experiment, in which the Yet the belief in creativity is still going strong. In THE FIGURES ARE AMAZING by European standards. Accord- of industry giants Boeing and Airbus, the Chinese model will be participants were given a candle, a box of matches, and the online business network LinkedIn, the word that ing to the Chinese civil aviation authority, 70 new airports will able to travel up to 5,500 kilometers and carry 160 to 190 pas- a box of tacks and were told to attach the candle to the members most often use to describe themselves is be built and another 100 airports refurbished by 2015. Although sengers. Industry partners with many years of aviation expe- wall so that it wouldn’t drip. As it turns out, the task can “creative.” Visionaries such as Grant, Florida, and Econ- the speed of expansion may seem break-neck, even by Chinese rience will help with planning and construction. For instance, only be solved creatively: by placing the candle in the box omides have shown the way—now it’s up to us to use standards, it is necessary. Since Chinese air traffic began opening General Electric will provide the engine of the C919 while and tacking the box to the wall. Interestingly, the partic- their ideas to develop something new. up, the number of passengers has doubled every seven to eight Evonik will contribute the extremely stable and lightweight ipants who were promised a monetary incentive needed years. That’s why China plans to buy almost 1,000 new aircraft ROHACELL construction for the rear of the fuselage. three minutes longer than their competitors to attach the in the next three years alone, according to a government spokes- The material, which is already being used by large manufac- candle to the wall. SUMMARY person at the Annual General Meeting of the International Air turers such as Boeing and Airbus, helps reduce weight by up to • Creativity drives economic growth and is especially Transport Association (IATA), which took place in Beijing this 60 percent. This in turn reduces fuel consumption, thereby low- Are creative people cut out to be leaders? sought after in diffi cult times. Specifi c initiatives can summer. The Chinese fleet will thus soon include 4,000 aircraft. ering costs and the environmental impact. Says Uwe Lang, an But research has also taught us something else: that cre- jump-start innovative startups—and entire regions In 2016, the first passenger jet made in China, the C919 from Evonik marketing expert in the aviation sector: “Aircraft manu- ative types tend to be poor managers. A study recently • Traditional business values such as incentives, leadership, Commercial Aircraft Cooperation of China (COMAC), will be facturers want high-quality lightweight materials. And they ex- conducted at the University of Pennsylvania found that and effi ciency are at odds with a culture of creative ready for takeoff. Conceived as an alternative to the machines pect our solutions to be economical at the same time.”

creative people often do not make the best managers. experimentation PIERRE BESSARD/REA/LAIF PHOTOGRAPHY:

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

46_Evonik_02-12_EN 46 05.10.12 15:53 47_Evonik_02-12_EN 47 09.10.12 17:01 48 GROWTH E-COMMERCE

Cashing In on the Boom

Online retail is the latest promising growth sector on the Indian subcontinent. The business A courier for Flipkart got off to a slow start because credit cards aren’t widespread and online banking is considered has packed his backpack. He delivers almost all risky. A solution was found by using an old-fashioned method—cash online orders via motorcycle—if need be, TEXT STEFAN MAUER he's even willing to transport ﬂ at-screen

televisions KAINAZ AMARIA/REDUX/NYT/LAIF PHOTOGRAPHY: PHOTOGRAPHY:PASCAL PHOTOGRAPHY:PASCAL SITTLER/REA/LAIF The boom in online retail has created new jobs for delivery agents: Packages are often still delivered using old-fashioned hand carts An internet café in ROHIT starts his day very early by Indian standards. tive payment methods and accepting cash payments Jaisalmer—a gateway At eight o’clock in the morning, he and three col- upon delivery. to e-shopping for leagues are gathered in a courtyard in suburban It also explains why couriers such as Rohit are the wider population: Only about 20 million Mumbai, impatiently waiting for a delivery truck to obliged to carry quite a lot of cash around. More than Indians have their arrive. The four men then move quickly to unload half of all online orders now specify payment by cash own Internet access two large bags marked with a yellow and turquoise on delivery. For retailers, it’s an expensive set-up: ad- logo. The bags contain several hundred packages, ministering each payment by cash on delivery costs which the men register in a computer system using about 50 cents per order. But for most companies, the hand-held scanners. After that, they sort the pack- increase in customers more than makes up for any ages according to addresses and stow them away in losses. “Our growth has forced us to reduce our mar- their backpacks. Then Rohit jumps onto his motor- gins,” says Sachin Bansal, the founder of Flipkart and cycle and takes off with his deliveries. the firm's Managing Director. “But next year we ex- We are visiting one of the local distribution cen- pect to make a profit once again.” Flipkart has also set ters of Flipkart, India’s largest online retailer and ambitious sales goals. By 2015, the company’s annual the engine behind what many people consider to be revenue is expected to rise from 5 billion rupees to- potentially one of the largest growth stories on the day (about €73.2 million) to 45 billion rupees (about subcontinent. €645 million). According to estimates produced by First Data, a consulting company, and the ICICI bank, the market New competitors and nervous investors for online orders in India more than doubled from However, competition is steadily increasing, too. Just 2009 to 2011, rising to about 500 billion rupees (ap- a few weeks ago, real estate brokers in Bangalore re- proximately €7.3 billion). What's more, this devel- ported that Amazon had decided to rent large-scale opment is taking place even though barely 20 million office space. At present, the American company only out of the country’s 1.2 billion inhabitants can use the offers price comparisons between different retail- Internet to make purchases. ers. Indians can only order products via the United For a long time, the Indian market was considered States—something most Indian customers cannot af- hard to reach by online retailers such as Amazon. It ford or are unwilling to pay for given the expensive is estimated that only one out of 50 Indians owns a shipping and handling costs involved. Following its credit card—an important prerequisite for online pay- recent takeover of the e-commerce platform junglee. ments. But even credit card owners often refuse to com, Amazon is now also seeking to establish a foot- divulge their credit card information on the Internet, hold in India. because they do not trust the security of online net- In view of the company’s keen interest in office works. That is one reason why online retail only re- space and its recent acquisition of a direct investment ally got started when retailers began offering alterna- license for India, change is certainly on the way. PHOTOGRAPHY: KCHRIS STOWERS/PANOS PICTURES STOWERS/PANOS KCHRIS PHOTOGRAPHY: Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

48_Evonik_02-12_EN 48 05.10.12 15:55 49_Evonik_02-12_EN 49 05.10.12 15:55 50 GROWTH E-COMMERCE GROWTH EDUCATION 51

Africa’s Einstein Numerous geniuses are waiting to be discovered in Delivery agents for Africa, whose population today is about one billion people. Neil Turok has India’s largest taught at Princeton online retailer Flipkart That's the belief of Professor Neil Turok, one of the (NJ, USA) and sort out packages most highly decorated African scientists. He has established Cambridge (UK) containing online orders PHOTOGRAPHY:KAINAZ AMARIA/REDUX/NYT/LAIF and is the Director innovative universities all over the continent in of the Perimeter order to foster education in the mathematical sciences Institute for Theo- retical Physics in TEXT MARTIN FREY Ontario (Canada) Internet customers of tomorrow: School children gather around a mobile virtual classroom. The information cart is an educational aid

Indeed, Amazon’s entry into the Indian online mar- mated to be around US$1,455 per capita and is set to ket seems to be only a matter of time. increase to US$2,226 by 2017, according to the Inter- Even though no one yet doubts the overall growth national Monetary Fund. What’s more, online retail potential of e-commerce, the new competition is a promises to improve the flow of supplies to smaller cause for concern as far as investors are concerned. towns and villages. This in turn might have dangerous consequences for For his part, Rohit has noticed that his employer online retailers. Due to Indian regulations, young offers a growing range of products. More and more start-up companies are very rarely financed through often, he is asked to deliver cell phones and MP3 play- the stock market because they are required to report ers rather than books. And every once in a while, he profits first. Banks also seem to be shying away from even transports flat-screen televisions on his motor- offering financial support to start-ups. Even larger cycle. In large cities such as Mumbai, Flipkart uses companies such as Flipkart mainly rely on venture its own delivery service and large warehouses that capital investors who have become increasingly cau- guarantee a delivery of most articles within three tious. During the first six months of 2012, they in- days. In smaller towns and villages, external deliv- vested more than US$100 million in the sector. Dur- ery agents are used. Says Managing Director Sachin ing the same time span a year earlier, the equivalent Bansal: “We don’t want to start a price war. We de- investment figure was almost US$180 million. fine ourselves through our service.” Flipkart recently raised its minimum order price for free delivery by NEIL TUROK has ambitious plans: He intends to discover the next minds further or to connect with the global science community... I Price war in the online market 50 percent, up to 300 rupees (just over €4). There Einstein in Africa. To that end, the South African physicist and don’t think it’s stretching things to say that when a continent with With the market entry of retail giants like Amazon, are no official figures yet on whether customers have astrophysicist has established academic institutions in Nigeria, the diversity of Africa enters basic science in a big way, they’re go- pressure on profit margins is set to increase. Today, remained loyal. At least as far as Rohit is concerned, Senegal, Ghana, and South Africa. This year Ethiopia will follow, ing to bring a whole lot of creativity and originality to bear.” Turok retailers are already selling certain articles—partic- things haven't noticeably changed: He still takes sev- and ultimately Turok plans to set up a total of 15 African Institutes points out that higher education can act as a job engine and accel- ularly electronic equipment, which traditionally has eral daily trips to the warehouse in order to refill his for Mathematical Sciences (AIMS) across the whole continent. erate the continent’s social and economic development over the low profit margins—below their buying price in or- backpack. The 54-year-old is one of the most highly decorated African long term, just as it has in Singapore and South Korea. der to increase customer loyalty. In addition, orders scientists, and he is utterly convinced of his cause. He compares Day-to-day activities at the AIMS institutes are very different worth just a few euros are usually already shipped the situation in Africa with that in Europe a hundred years ago. from those at European universities. “Africa is the ideal place to free of charge. Even in the case of the leading retailer SUMMARY Back then a generation of young, ambitious Jews first gained ac- be completely innovative in advanced education,” says Turok. At Flipkart, the average order is not even worth €20. • Online retail is considered a promising growth sector in cess to higher education—and quickly brought forth legendary AIMS, professors live on campus together with the students and But while the future of individual companies India. After all, at present only 20 million out of 1.2 billion scientists such as Jacobi, Einstein, Bohr, and Pauli. According to are accessible 24 hours a day. There are no exams, only discus- looks uncertain in this competitive market, demand inhabitants have Internet access Turok, if a billion Africans were given similar opportunities, we sions and group work. So far, a total of 412 students from 32 for online retail is steadily growing. Almost half of • New competitors are squeezing proﬁ t margins and would see a corresponding development. African countries have graduated, including Lesotho’s first cos- India’s population is under the age of 25, and their worrying investors In the British magazine Wired, Turok explains that in Africa mologist. So if you ask Neil Turok, it’s just a matter of time until purchasing power is rapidly rising. The average an- • Pioneers in the online retail sector are relying on improved brilliant individuals “have almost no opportunity to develop their the next Einstein is discovered. PHOTOGRAPHY:DDP IMAGES/AP/RAJESHKUMAR SINGH IMAGES/AP/RAJESHKUMAR PHOTOGRAPHY:DDP nual middle-class income in India is currently esti- service in order to gain and retain customers PETTERSSON/LAIF PER-ANDERS PHOTOGRAPHY:

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

50_Evonik_02-12_EN 50 05.10.12 15:56 51_Evonik_02-12_EN 51 08.10.12 09:09 52 GROWTH INNOVATION GROWTH INNOVATION 53

A Traveling Chemical Factory Chemical production is becoming more customer-focused and decentralized, thanks to individually equipped mini-plants housed in containers TEXT KLAUS JOPP

THE KÜBLER FREIGHT FORWARDING COMPANY almost always transports special heavy-duty shipments at night, when there are fewer vehicles on the road. A brawny tractor unit with a long trailer has now been on the road for over five hours on its way from Blaubeuren to Hanau. Only a few more kilometers and some curves remain before it reaches the Hanau-Wolfgang industrial park, where a heavy crane is waiting for its valuable cargo, which weighs nearly 20 tons. After three hours of intense shunting, the approximately 12-meter-long “Evotrainer” now stands securely in its designated location behind Building 1024. The container doesn’t exactly look spectacular at first glance; only its many doors and cables indicate its special purpose. Indeed, this colossal “tin can” could revolutionize the way chemicals are produced. The Evotrainer is the latest instrument developed by Evonik Industries AG for substantially accelerat- ing the time it takes to transform an initial idea into an innovative product that can be manufactured efficiently. It also makes it possible to more quickly exploit growth potential. “We’ve created a universal infrastructure for chemical processes that treats the lab, the technical department, and the production facility as a single unit, so to speak,” says Dr. Jürgen Lang, Se- nior Scientist at Process Technology & Engineering. The Evotrainer was developed for several reasons. First of all, time is playing an ever-greater role when it comes to penetrating new markets. Secondly, the chemical industry is becoming more and more global A chemical factory “on a hook”: The and following its customers to the farthest corners of complete production the earth. Finally, the German chemical industry in facility in a container particular needs to maintain the innovative capability can be easily trans- PHOTOGRAPHY: GERD SCHEFFLER, EVONIK INDUSTRIES AG 2012 INDUSTRIES AG EVONIK GERD SCHEFFLER, PHOTOGRAPHY: that gives it a competitive edge. Creating a chemi- ported anywhere in the world by truck, rail or ship Evonik Magazine 2 | 2012

52_Evonik_02-12_EN 52 05.10.12 15:57 53_Evonik_02-12_EN 53 05.10.12 15:57 54 GROWTH INNOVATION GROWTH INNOVATION 55

The “tin can” is revolutionizing the production PRODUCTION of chemicals LAB

TECHNICAL DEPARTMENT

cal factory with a complete infrastructure in com- The ﬁ rst step involves setting up a lab for a new In the second step, the new process Finally, the manufacturing facility is built and put pact form is a major step forward. process. The process is then tested on a small is further automated and tested again into operation. All three steps are carried out in the The fine and specialty chemicals segment in par- scale to see if it functions properly and whether on a technical scale. If all goes well, Evotrainer, which saves time and money. ticular does not necessarily need large-scale manu- 1 improvements need to be made 23it’s then ready for use in production operations The container can be used almost anywhere facturing facilities, because customers often require only several kilograms of many substances, mixtures, and preparations, rather than tons of them. Never- theless, the products involved are indispensable because they perform important functions or else ensure high quality. A mini-factory like the Evotrainer is ideal for producing such chemicals. The 3x12-meter steel container holds everything needed for production—including reactors, process control and safety systems, and storage space for raw materials. It also comes with cables for data transfer and everything else required for a chemical process—i.e. electricity, water, and technical gases. The complete environmental protection and occupational safety concept employed in the container covers everything from fire and explo- sion protection systems to emergency exits and collection pans for all types of fluids. “This basic equipment setup allows the various standards and regulations that differ from country to country to be complied with quickly,” says Ali Hartwig, who is responsible for small-scale processes at Pro- cess Technology & Engineering. This means the Evo- trainer can be used anywhere in the world for chemical production operations. One of the first Evotrainers ever developed is located at Evonik’s Rheinfelden Pack a complete chemical production facility into a Manufacturing Practices (GMP) standard. The EU is plant, where it has been producing highly pure si- The EU and the small space—that was the task assigned to the European conducting these types of projects, which also lane compounds for use in chip manufacturing since Union’s (EU) Copiride research project, which Evonik include the F3 Factory (fast-flexible-future), in order 2010. The mobile chemical plant that was shipped to chemical plant of and several other companies and universities have been to strengthen the competitiveness of the European Hanau-Wolfgang in the special heavy-duty truck will the future working on since 2009. A second EU project known chemical industry. The idea is to introduce flexible

be prepared for production operations by the end 2012, DR. DIETERGRAPHIC: DUNEKA(3) INDUSTRIES AG EVONIK as Polycat has Evonik developing a high-tech infrastruc- production processes that will help to keep this key ture for production processes based on the Good industrial sector operating in Europe.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

54_Evonik_02-12_EN 54 10.10.12 13:51 55_Evonik_02-12_EN 55 10.10.12 13:51 56 GROWTH INNOVATION

Thinking ahead: Dr. Jürgen Lang (left), Dr. Hannes Richert, and Ali Hartwig (right) played a major role in the Evonik Global development of the Evotrainer. The ﬁ rst such complete factory, A journey around the world to international Evonik locations located in Rheinfelden, is now manufacturing silane compounds for use A new perspective on Africa: From Johannesburg, in chip production Evonik Industries is working to intensify its PLEXIGLAS business in the continent’s dynamically growing economies

New ideas for the future: RENT-A-PLANT

of 2012. “As soon as the production process for a tion, it’s important for companies to get their prod- special polymer is in place, the finished factory will be ucts to market as quickly as possible, while at the same moved to another chemical manufacturing location,” time lowering potential risks in the period between says Lang. A new container will then be sent to Hanau product development and the production launch. “The and equipped for further production operations. Evotrainer makes it much easier for us to adjust to re- quirements regarding volumes, for example,” Richert Eliminating traditional borders explains. “With it, we can now also produce large vol- The chemical production containers largely eliminate umes in a small facility, and we can immediately dou- the traditional borders between lab testing, pilot facil- ble capacity or increase it many times over by operat- ities, and actual production. The manufacturing pro- ing the facilities in parallel.” cess is completely set up and tested in the Evotrainer, The mini chemical factory has even made it possi- and after that the container is sent by truck, rail or ble to develop completely new business models at the A Bright Future ship to its final destination. “The benefits are obvi- Evonik Group. One such model is RENT-A-PLANT, ous, because the working environment is the same which works as follows: Experts from Process Tech- S O U T H A F R I C A From the economic powerhouse that is South Africa, Evonik Industries from beginning to end,” says Dr. Hannes Richert, Se- nology & Engineering develop a process in coopera- is developing its PLEXIGLAS business throughout the entire continent nior Project Engineer at Process Technology & Engi- tion with the research and development departments neering. “The process control technology, which is at a particular Business Line. After that, the fully available from the start, is especially helpful here.” In equipped production container is sent to the desired ot long ago, the acronym BRIC stood percent. Indeed, many places are seeing and light, and is particularly in demand other words, the Evotrainer is not a lab that works with location following its successful commissioning. Once N for a select group of ascending a rise in wealth and a growing middle class. for neon signs and other lighting solutions Bunsen burners, double boilers or rotary evaporators; it is no longer needed, it can be brought back and re- economic powers: Brazil, Russia, India, “The situation in Sub-Saharan Africa in the vibrant cities throughout the region. it’s a facility equipped with heat exchangers and col- equipped. Crane and shipping companies like Kübler and China. Now there’s talk of BRICS, has changed drastically,” explains Holger Together with the South African plastics umns that are electronically monitored and controlled. then step in—with drivers who will most probably be indicating that South Africa has also joined Morhart, General Manager of Evonik processing company Ampaglas Plastics

Moreover, in a completely new development, the pro- given a night shift. 2012 INDUSTRIES AG EVONIK WILDHIRT(2), STEFAN PHOTOGRAPHY: the ranks of countries on the rise. This Acrylics Africa (Pty) Ltd. He has worked in Group, Evonik has set up a joint venture in cesses are designed with continuity in mind from the achievement is mainly due to the role this Africa for 15 years and at Evonik for nine Elandsfontein that will supply the region very start. The degree of automation is also much country of 50 million plays as the gateway years. “The average per capita income and with locally extruded PLEXIGLAS sheets as higher than normal; that helps to reduce costs. SUMMARY to the African continent. With approxi- the standard of living are increasing. New of spring 2013. “We’re starting with the This small-scale approach to production also gives • Mini chemical factories in containers are revolutionizing mately one billion inhabitants, almost as markets are opening up—for us as well.” booming markets, but every year we plan to the Evonik team the opportunity to protect its valuable the production of chemicals. These plants can be set up many people live here as in China or India. expand our sales to more countries,” says knowledge and expertise. “Bringing our processes close to customers nearly anywhere in the world And many African economies are New markets every year Morhart, who is the only European on the to customers around the world in a type of black box, • The ﬂ exible structure of the manufacturing units in booming. Ghana, for example, boasted the That’s why Evonik Industries intends to use team. “It’s important that we are producing so to speak, enables us to safeguard our specialized containers has made it possible to create a new business world’s second-strongest economic growth its base in South Africa to strengthen its locally and understand the specifics of knowledge more effectively,” Lang says. model known as RENT-A-PLANT. After production in 2011—an impressive 13.6 percent. activities for one of its traditional products: these regional markets,” he continues. The relative simplicity of the Evotrainer also offers operations are completed, the mini factory is removed and In Nigeria, Botswana, Kenya, and Tan- PLEXIGLAS for the construction and light- “We’re doing development work within the other advantages. In view of the fast pace of innova- re-equipped for a new assignment zania, the economy grew by five to seven ing industries. This material is both durable market—with promising results.” PHOTOGRAPHY: TIM GARTSIDE/AGE/F1ONLINE PHOTOGRAPHY: Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

56_Evonik_02-12_EN 56 05.10.12 15:57 57_Evonik_02-12_EN 57 05.10.12 15:56 58 GLOBAL GLOBAL 59

Lightening Up Electric Cars “Extremely CHINA Evonik Industries has all the materials that are needed for modern mobility. Several innovations presented at Asian auto shows are pointing the way forward Complex” CHINA In this interview, Sven Augustin from the Automotive Industry Team talks about China’s role in the development of electric mobility and other topics xperts all agree that the future of mobil- component in the Roewe E50 is the model’s project as the Director of Application E ity is electric. Indeed, every well-known hood, which Evonik manufactured with a Technologies for Epoxy Formulations in automaker is now developing electric partner in Germany in accordance with the Marl. “That’s why we need to ensure Is the future of electric mobility in China? vehicles for the mass market, in many cases automaker’s exact technical specifications. that our composite can be processed at least Global automakers are clearly in the lead in cooperation with battery manufacturers The hood is made of the Group’s own almost as fast.” Components that can at the moment in terms of technology. and energy supply companies. Evonik ROHACELL structural foam and is up to be built less expensively and in very short Japan and Germany are strong in light- Industries AG is heavily involved in pioneer- 70 percent lighter than a conventional manufacturing cycles thanks to VESTA- weight design and battery-operated ing projects in this sector. Electric mobility steel hood. The ROHACELL is mounted in MIN have made what used to be considered vehicles. Nonetheless, the size of China’s is being pursued on a broad scale in China. the hood like a “sandwich” between two impossible a reality today. domestic market for urban mobility and Practically no other country has set itself carbon fiber composite layers, each of It therefore comes as no surprise that its government’s positive attitude toward such ambitious goals in this area: The Chi- which is only 0.5 millimeters thick. Here Evonik recently laid the cornerstone for an electric mobility will make it a key nese government plans to put five million as well, a special epoxy formulation isophorone production plant at the Group’s market for electric vehicles. Those who purely electric vehicles on the road by based on Evonik’s VESTAMIN curing Multi User Site China (MUSC) in Shanghai. develop the technologies today

2020. It will take a while to get to that agent was used—with everything optimized The isophorone product family includes will reap the benefits in the future. IMAGES/SPL MAURITIUS PHOTOGRAPHY: point, and for the moment the technology to ensure cost-efficient production. VESTAMIN, which is also found in indus- What major challenge still remains? New materials: Nanotubes made of carbon, like those shown in this computer model, promise to leadership is still largely held by German trial flooring and is increasingly being Electric cars require a new vehicle archi- make possible entirely new applications—for example in the semiconductor and electrical industries and Japanese automakers. Nevertheless, More rapid manufacturing used as a curing agent in lightweight mate- tecture that’s not based solely on steel. conditions in the “Middle Kingdom” are The weight savings are obvious, but auto- rials for automobiles and wind power Significant weight reductions can be good for electric mobility. The government makers are also used to molding plants. If the electric car revolution does in achieved at a reasonable cost through the supports the development of new vehicles metal sheets in just a few seconds,” says fact begin in China, Evonik will therefore use of smart material concepts and series Getting In on the Ground Floor and is also helping to build the required Dr. Rainer Lomölder, who worked on the be more than ready to participate. production. But this is an extremely CANADA The Corporate Venturing unit at Evonik Industries AG is never far away infrastructure. The process is also being complex process. The goal is to achieve a when groundbreaking technologies are created at young startup companies driven by the fact that China is constructing balance between weight, battery capac- new urban centers from the ground up ity, range, and overall vehicle cost in and the country’s large new middle class is order to enable mass production. In addi- emiconductors from 3D printers, carbon Evonik plans to invest up to €100 million becoming more mobile and affluent. tion, electric vehicles need to become S nanotubes, insecticides made from in promising startups in the medium term. financially attractive in the medium term spider venom—products that sound like the The investments will be targeted at key Solutions for series production even without government subsidies. inventory of a science fiction novel are megatrends and focused on companies in All of this has generated a lot of interest in What is Evonik Industries contributing just part of the everyday routine at Pangaea Europe, the USA, and Asia. prototypes like the Roewe E50, which was to the new vehicle architecture? Ventures. This investment firm in Vancou- “Evonik is pursuing an ambitious presented by China’s biggest automaker, The automakers are coming to us to test ver, Canada, specializes in supporting start- growth strategy,” says Evonik Executive SAIC, at the Shanghai International Industry new materials for vehicle bodies and ups that have developed forward-looking Board member Patrik Wohlhauser. Fair and the Beijing Motor Show. Plans call other components. The success of series technologies. Evonik Industries began “Corporate venturing is an ideal supple- for this small city car to be launched on the production heavily depends on the working with the company in the summer ment to existing innovation processes market as a series-produced vehicle by materials that are used, and Evonik of 2012 and is now participating in and structures at the Group.” 2013 at the latest. The model will be able to has indispensable expertise regarding the “Pangaea Ventures Fund III,” which The goal here is for Evonik to gain travel 135 kilometers on a single battery materials and applications. provides capital for energy, access to new technologies and contribute charge. This feature makes it ideal for environmental, and nanotechnologies. its own expertise through a presence on everyday use—and it’s made possible in the supervisory boards, for example. This is Roewe E50 in part by customized light- Access to new technologies already happening in North America. weight design solutions from Evonik. For This investment focus fits in well with The partnership also offers advantages for example, the prototype is fitted with Evonik’s strategy. “With our investment in Pangaea, as Chris Erickson, General special PLEXIGLAS windows that weigh 40 Sven Augustin, the Pangaea Ventures Fund III, we now Partner at Pangaea Ventures, points out: to 50 percent less than conventional Technical Marketing have a strong partner in one of the world’s “The companies in our portfolio benefit windows. The taillights are equipped with Manager from the most dynamic venture capital markets, from cooperation with Evonik when Automotive Industry

a special variant of the material that not IMAGO/XINHUA PHOTOGRAPHY: one that’s also directly related to our own they move into new markets.” In other Team (AIT), which only reduces weight but also improves light Successful cooperation: The Roewe E50 prototype from SAIC owes its light weight and long range acts as an interface activities,” says Evonik’s Chief Innovation words, Evonik is also never far away

diffusion. However, the truly exceptional to materials from Evonik Industries—especially the ROHACELL used in the electric vehicle’s hood EVONIK/CARSTEN PAUL PHOTOGRAPHY: to automakers Officer, Dr. Peter Nagler. when science fiction becomes reality.

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

58_Evonik_02-12_EN 58 05.10.12 15:54 59_Evonik_02-12_EN 59 05.10.12 15:54 60 GLOBAL GLOBAL 61

Biolys III: Powerful Technology BRAZIL The country has advanced to become a global food production heavyweight in just a short period of time. Now, Brazil is focusing on sustainable growth

city’s coat of arms often tells the story for example, allows land to be farmed A of intrigues and grand weddings, war more effectively. Amino acids are very im- and peace, and the crafts that shaped it portant here—and Evonik Industries is for centuries. Expert knowledge is often the only company that manufactures all required to decipher the codes in the four amino acids used in animal feed: me- crests—but this is not the case with the coat thionine, threonine, tryptophan, and of arms of the city of Castro in the south- lysine. The Evonik Group and the US feed ernmost region of Brazil. Anyone can figure company Cargill are now constructing a Three Times More Efﬁ cient Giant farms, like the out the story because the crest clearly new facility for biotechnological produc- Seven billion people now live on Earth and an additional 78 million will be added each year between one in Brazil pictured shows a river and green fields dotted with tion of lysine (brand name: Biolys) in Cas- now and 2015. According to the UN, our planet will have to feed nine billion people in 2050. Raising livestock is here, cannot safeguard the future grazing cows and horses. The entire scene tro. The new plant, which is being built very important because meat consumption is also rising rapidly around the globe. Special amino acids from food supply by is framed by cobs of corn and ears of grain. on a site already occupied by Cargill, will Evonik Industries can help reduce the associated burden on the environment. Biolys offers one example of how themselves. Efﬁ ciency There’s no doubt that Castro is all about go into operation in 2014 and supply the Evonik is addressing the challenge by expanding its global amino acid production capacity must also increase agriculture—and agriculture on a grand entire region with lysine. “We’ve seen in- scale. The state of Paraná, where Castro is creasing demand in Latin America and located, is an important agricultural especially in Brazil for years,” says Evonik center that supplies corn, cotton, wheat, Executive Board member Patrik Wohl- rally fluctuating mixtures of amino acids soy, peanuts, and beans. A lot of pigs and hauser. “By also investing here, we are Biolys I: More from Every Acre in feed. However, a huge amount of land is Biolys II: poultry are also raised here. Poultry in moving closer to customers, strengthening RUSSIA Amino acids are helping to make livestock breeding more efficient, needed to cultivate soy for this purpose: particular plays a very important role in our position in these important markets, and thus farmland cultivation more effective, in the biggest country on Earth A land area nearly the size of Great Britain Far from Full Brazil, as the country is now the world’s and laying the foundation for further is required for growing the soy that’s USA The food superpower is also looking biggest exporter of chicken. In fact, Brazil growth for our business with lysine.” Cas- used for feed in the EU alone. Feed manu- to boost efficiency. Here, too, Evonik has increased its chicken production five- tro was chosen as a production location here’s no shortage of space in Russia: pany will build a factory for producing facturers are therefore relying more Industries is expanding production capacity fold over a period of just one generation. not only because of the large number TThe country with the largest land area lysine in Volgodonsk, a city of 170,000 and more on amino acid additives like of customers and the good logistical infra- in the world used to be known as the located north of the Caucasus. The facility lysine. Such additives replace millions of Local raw materials, global markets structure in the region but also because of “breadbasket of Europe.” Agricultural will have an annual production capacity tons of soy every year just in the EU—and here’s a very good reason why Nebraska As is the case in many other emerging the excellent local supply of raw materials. production plummeted in the 1990s, of 100,000 tons after it opens in 2014. they also significantly reduce the burden Tis called the “Cornhusker State”: markets, the agrarian revolution in Brazil The Biolys manufactured in Castro will however, and has only recently recovered Biolys will be manufactured very on the environment. It’s practically an agrarian nation in its own has been driven by technologies that be produced from corn—the same crop that to a large extent—mainly due to more efficiently using the Group’s own bio- Evonik has demonstrated in an ecolog- right, with a total area of 200,000 square increase efficiency. Improved animal feed, adorns the city’s coat of arms. efficient production methods, which are technology process, which also em- ical balance sheet certified by TÜV Rhein- kilometers. Its population of 1.8 million is vital to farming success. Russia is now the ploys special microorganisms. The wheat land that adding Biolys and other sub- relatively small, however, but Nebraska world’s fourth-leading wheat producer grown in the region will serve stances to animal feed is an makes up for this lack of people with an and plans to catch up in meat production here as a renewable raw material. environmentally friendly way to ensure abundance of corn, wheat, soy, cattle, and as well. Modern animal feeds, and espe- proper and healthy nutrition standards for pigs. Blair is a small town in the far-eastern cially the essential amino acids they con- Better feed animals. Evonik not only supplies all four corner of the state. It is here, right on tain, play a key role here. Mammals can- While the capacity expansion is a response key amino acids for animal feed but the border to another corn state, Iowa, that not produce these protein building blocks to higher demand, it’s also good for the also manages the world’s largest database Evonik Industries has been manufacturing themselves, so they have to be ingested environment. “Only if the amino acid con- of amino acid profiles for raw ingredients. amino acids for livestock husbandry for with their food. Evonik Industries is centration is right can animals put the The Group’s labs analyze around 260,000 quite some time in cooperation with the the only company in the world that sup- nutrients in their feed to work,” says Dr. samples each year in order to identify US food and agricultural company Cargill. plies all the important amino acids live- Walter Pfefferle, head of the Bioproducts the amino acid mixtures of various types The demand for Biolys produced using stock need. Production capacity is being Business Line. “If the concentration of grains from different regions. Experts biotechnology processes is also growing sharply expanded at the moment—in is wrong, the nutrients will be excreted use this information to create optimal significantly in the USA, which is why Russia as well. unused—in other words, a large share feed mixes—which is the only way to get Evonik decided to expand its facility in The Essen-based specialty chemi- of a harvest will end up as slurry for the most out of every acre of farmland. Blair. The final phase of the project cals company has teamed up with Russia’s no good reason.” To prevent this, large This ability is becoming more and more was completed in the summer of 2012;

Varshavsky Group to establish the OOO amounts of soy, fish meal, and wheat are important—in Russia and everywhere capacity in Blair has now been PICTURE-ALLIANCE DPA PHOTOGRAPHY: DonBioTech joint venture. The new com- normally used to balance out the natu- else in the world. doubled to 280,000 tons per year. Both farmers and the environment beneﬁ t when Biolys helps chickens get more out of their feed PHOTOGRAPHY: DDP IMAGES/AP PHOTOGRAPHY: Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

60_Evonik_02-12_EN 60 05.10.12 15:53 61_Evonik_02-12_EN 61 05.10.12 15:53 62 LIVING FINDING 63

At a Glance Here you will ﬁ nd all of the developments and products from Evonik Industries AG that are referred to in this issue, sorted according to the article where they are mentioned On the Trail of the Hippo Tom Schimmeck looks at the mystery of how nature regulates biological growth ILLUSTRATION PETER PICHLER A Plexiglas windshield and ROHACELL foam components save a considerable amount of weight in the SAIC Roewe E50

GROWTH IS ALL AROUND US. When 1,000 times”? This seems highly unlikely, ulate growth? “In a very abstract sense, A Bright Future, page 57, and Lightening Up Electric Cars, page 58 Powerful Technology, page 61 Lightening Up Electric Cars, page 58 we think of Mother Nature, we picture because if some cells were to die, part of there seems to be some kind of feedback VESTAMIN® products are used as crosslinkers for Methionine is an amino acid. Like vitamins, abundance: lush green forests, luxuriant the organ in question would fail to de- for organs, for example, that tells the cells to PLEXIGLAS® molding compounds are thermo- epoxy resins, which are used in corrosion protec- amino acids are vital nutrients for human beings pastures, vast flocks of birds. And yet, in velop. “But that’s not the case,” Halder ex- stop as soon the organ has reached the right plastics made of polymethyl methacrylate (PMMA). tion, concrete restoration, industrial floor coatings, and animals. Between eight and ten amino the natural world at least, there are lim- plains. “The organ continues to grow un- size.” Similarly, bacteria produce chemi- The compounds can be given a wide variety of and composite materials. acids—known as essential amino acids—cannot be shapes, colors, and functions. A number of chemical, Application: Automobiles, wind power systems produced by animals, and therefore have to be its to growth. Every tree, insect, and germ til it reaches its designated form.” In other cal signals as soon as they reach a certain physical, and application-related properties make Link: http://crosslinkers.evonik.com ingested daily with the intake of food. Because only reaches a certain size. The same is words, there must be some kind of con- concentration, and these halt their growth. PLEXIGLAS® brand molding compounds an excel- Evonik produces the four key amino acids for true of leaves, organs, and blood vessels. trol mechanism that monitors and regu- “Obviously there are certain mechanisms lent choice. These properties are indispensable More from Every Acre, page 60, advanced animal feed, it makes a major contribu- in the production of high-quality components in Far from Full, page 61, and tion to securing the world’s long-term food But how does an organ know when to stop lates growth. Is this similar to an architect in nature that say ‘stop’ as soon as a certain injection molding, injection-blow molding, and Powerful Technology, page 61 supply. Evonik is the world’s leading supplier of growing? “That’s by no means a stupid who is supervising a building project? “Ex- amount of growth has been achieved.” extrusion processes. products for this segment. Application: Paint, plastics Biolys® supplies the essential amino acid L-lysine. Application: Animal feed additive question,” says the developmental biolo- actly,” says Halder. “Like an architect who A researcher must devise experiments It is manufactured using fermentation and also gist Professor Georg Halder. He has been knows that ten windows have been dam- to show how the various aspects of this Link: www.plexiglas-polymers.de Link: http://corporate.evonik.de/de/content/ contains valuable byproducts from the fermenta- product-stories/Pages/tierernaehrung.aspx investigating the biological regulation of aged during installation and now have to mechanism function, before assembling tion process. Evonik is the only company in Ready for Takeoff, page 47, and growth processes ever since his student be reordered.” them all into a whole. According to Hal- the world that supplies all four of the essential Threonine is an essential amino acid. Evonik Lightening Up Electric Cars, page 58 amino acids for animal feed from a single days. “Growth,” he says with a laugh, “is As soon as the organ is fully grown, a der, biologists tend to think like engineers Industries produces L-threonine under the brand ROHACELL® is the name of the finely porous source: DL-methionine, L-lysine, L-threonine, name ThreAMINO®. always an interesting topic!” Hippo signal halts the process of cell divi- and look for a magic switch that controls hard foam made from polymethacrylimide (PMI) and L-tryptophane. Application: Animal feed additive Following positions in Switzerland and sion. What biologists still don’t understand everything—in this case, cell growth. Yet that Evonik Industries AG supplies for the produc- Application: Animal feed additive Link: http://feed-additives.evonik.com the USA, the 45-year-old now heads a major is how this is regulated, and by what kind of he is skeptical that nature can be under- tion of high-quality lightweight composite com- Link: www.evonik.com/health-nutrition research project that is looking into growth signal. “That’s still a mystery,” Halder ad- stood in this way: “Isn’t what we call na- ponents. The material, which is both very reliable Tryptophane is a well-known protein-forming and very light, is used for lightweight sandwich (proteinogenic) amino acid. Tryptophane is control and cancer mechanisms at the Cen- mits with refreshing frankness. “We still ture really the product of seemingly ran- structures in automobile and aircraft manufactur- used to ensure an adequate supply of essential ter for Human Genetics of the University of have no idea how this is measured.” dom events that are arranged in a seemingly ing in particular, but also in railroad applications, amino acids, in particular when low-protein Leuven in Belgium. Along with other scien- There is a lot of interest in the Hippo random way and that function in a miracu- medical technology, and sports equipment. pig feeds with a high cereal content are used, Application: Lightweight construction, insulation tists, Halder discovered the “Hippo path- pathway. After all, uncontrolled growth is lous manner?” because these types of feed mix may be Link: www.rohacell.com deficient in amino acids. way.” As he explains, each cell has a path- what is commonly known as cancer. More In other words, a living creature is not a Application: Animal feed additive way via which it receives external signals. knowledge here could lead to new drugs. machine where each part has its designated Link: http://feed-additives.evonik.com The unusual name for this pathway arose in Links to certain cancers have now been dis- purpose. “In biology 1,010 random events the course of experiments with fruit flies. covered, and the problem seems to lie in the conspire to make a cell do precisely one Manipulation of their growth processes by signal pathway. Yet Halder urges caution: thing and not another.” But if you change humans produced insects with oversized “We still don’t know why.” the context, you’ll also change the corre- heads and a dark and wrinkled skin similar Is there both good growth and bad lations. According to Halder, this is espe- to those of a hippopotamus. growth? “Good and bad are human labels,” cially true of in vitro tumor research: “Can- Halder’s work began with a basic ques- Halder warns. “But there’s certainly growth cer biology is going through big changes. tion. Is cell growth programmed according that is unfavorable for an organism, the spe- We really should be thinking about start- to a simple command of the form “Divide cies, or the world.” So how does nature reg- ing anew.”

Evonik Magazine 2 | 2012 Evonik Magazine 2 | 2012

62_Evonik_02-12_EN 62 05.10.12 15:45 63_Evonik_02-12_EN 63 05.10.12 15:41 64_Evonik_02-12_EN 64 8FMMTVSQSJTFZPVXJUITPMVUJPOTCFGPSFZPV 1-&9*(-"4 &WPOJLJT(FSNBOZTDSFBUJWFQMBTUJDTTQFDJBMJTU DPOTUSVDUJPOTGPSMJHIUXFJHIUDPNQPOFOUT UISPVHI FWFOOPUJDFEUIFSFTBQSPCMFNoGSPNTBOEXJDI PVSJOOPWBUJPOT GPSXBSEUPHJWJOHZPVSCVTJOFTTGSFTIFOFSHZXJUI BMMUIFXBZUPIJHIQFSGPSNBODFQPMZNFST8FMPPL ® GPSTPQIJTUJDBUFEEFTJHOTPMVUJPOT

We’re happy when our plastics plastics our when happy We’re solutions inspire you with new ideas. new with you inspire solutions We love your problems. your love We 05.10.12 15:10