R&D and the Transformations Of

The Company That Changed Itself The Company That Changed Itself R&D and the Transformations of DSM Arjan van Rooij This book is published in cooperation with the Foundation for the Histo- ry of Technology (SHT). The mission of the foundation is to develop and communicate knowledge that increases our understanding of the critical role of technology in the history of the western world. Since 1988 SHT supports scholarly research in the history of technology. Among others this resulted in large scale national and international research programs and numerous individual projects. The organization also coordinates the international research network Tensions of Europe. For more information see www.histech.nl. This book has been made possible by the generous financial support of DSM. Cover design: Chaim Mesika, Hilversum, The Netherlands Layout: PROgrafici, Goes, The Netherlands Photos: DSM Central Archives, Heerlen, The Netherlands; p. 4: Foundation for the History of Technology, Eindhoven, The Netherlands: collection A.A. Weijts. isbn 9789053569559 nur 680 Amsterdam University Press, Amsterdam, 2007 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book. Table of contents Foreword by Jan Zuidam 7 Preface 9 1. Introduction: Research and Business in the Chemical Industry 11 The History of Industrial Research: Patterns and Themes 13 The Roles of Industrial Research in the Firm 17 Business Management and Industrial Research 21 The Development of Technological Capabilities in Firms 23 Design of the Book 25 2. From Works Laboratories to Centralised Research 35 Coal and Coke: The Establishment and Development of DSM in the 1910s and 1920s 35 Nitrogen Fertilisers: DSM’s Entry into the Chemical Industry 37 Keeping Up: The Establishment of the Central Laboratory 41 From Passive to Active: Research at the SBB’s Works Laboratory and the Establishment of the Central Laboratory 48 The Establishment of the Central Laboratory 54 3. Expansion and Diversification: R&D after the Second World War 59 The Growth of DSM’s Chemical Businesses after the Second World War 62 The Organisation and Management of Research 67 Expansion: Urea 75 Diversification: Caprolactam 82 More Diversifications: Polyethylene, EPDM and Melamine 99 A Failed Diversification: Lysine 114 R&D in the 1950s and 1960s 125 4. The Large Leap Forward: Redefining the Role of R&D in the 1970s 137 The Final Step Towards DSM’s Transformation into a Chemical Company 138 Re-Aligning Research and Business 141 DSM’s Entry into Fine Chemicals 149 Environmental Concerns: Research into Waste Water Treatment in the 1970s 162 Urea: Beyond Major Process Improvements 165 The Development of the HPO Caprolactam Process 166 Troubleshooting and Finding Markets: Melamine and EPDM in the 1970s 178 5 Plastics in the 1970s 181 A Large Leap but in Which Direction? DSM and the Central Laboratory in the 1970s 183 5. The 1980s: Moving Away from Cyclicality and into High Value-Added Products 195 Shifting Strategies and Research Policies in the 1980s 198 Dyneema: The Development of Strong Polyethylene Fibres 202 DSM’s Expansion in Fine Chemicals 212 Research and Bulk Chemicals in the 1980s 223 Searching for Products with High Value-Added 235 6. Conclusion. Research and Business at DSM 245 Enabling Diversification: Research and New Businesses 245 Unpredictability, Short-term and Long-term Research, and Business Management 256 Meeting Threats: Research and Existing Businesses 259 Other Roles of Research 262 Research and the Development of DSM 264 Epilogue: the 1990s 269 The Chemical Industry and DSM in Transition 269 Business and Research in the 1990s 273 ‘Growing Ideas’: Internal and External Research 275 Appendix 279 Managers of Central Laboratory, CRO and DSM Research 279 Graph A1: Research personnel, 1950-1999 281 Graph A2: Research expenditure as a percentage of turnover, 1949-1999 282 Graph A3: Licenses on DSM’s chemical processes sold by Stamicarbon, 1935-1999 (Five-year moving average) 284 Sources 285 Interviews 285 Archives 286 Serials and Journals 287 Unpublished Reports Concerning the History of DSM and DSM Research 287 References 289 List of Figures, Graphs and Tables 309 Index 311 6 the company that changed itself Foreword The pace of technological change has always been fast in the chemical industry. But a look back in history reveals more than just the speed of change; it also reveals the long-term continuities that shape a company. DSM is not the company it was a hundred years ago and it is not the company it was ten years ago. And yet there is one characteristic that has been a constant in the company’s history: the build-up of technological capabilities and organisational structures for the longer term. It is a feature that has shaped DSM’s transformations and will continue to do so in the future. This book documents an important part of the company’s history and helps us to understand the interaction between change and continuity. This book is not about R&D as such; it is about the results of R&D and the relationships between R&D and business. Companies have been facing these critical issues ever since they established R&D laboratories in the late nineteenth century, and they will continue to face them in the twenty-first century. This historical study shows how complex these issues are and how DSM’s response to them has evolved over the years. Cruci- ally, this book underlines that we cannot afford to become complacent but need to continue to work hard to build mutual commitment between R&D and business. This book also shows that no company can innovate on its own. In the case of DSM, this is as true today as it was when the company was foun- ded and when it took its first steps into the chemical industry. DSM has always nurtured an openness and receptiveness towards its environment, and these have served the company well. The changes in the last decade have been particularly striking, with an increasing geographical spread of R&D activities, decentralised R&D governance and a systematic sourcing of external research and new business development opportunities within the framework of an open innovation model. After more than a century, DSM is as vibrant as ever and very well placed to contribute to the sustainable development of society and industry through its constant innovations. Jan Zuidam Deputy Chairman of the DSM Managing Board arjan van rooij 7 Preface In 1998, Jacques Joosten (Director of Corporate Technology at DSM) ini- tiated a project to write a history of DSM’s research activities, with the aim of gaining a better understanding of the role of industrial research in the company’s development. He commissioned the Foundation for the His- tory of Technology (Eindhoven, The Netherlands) to write this history. Ton van Helvoort, Eric van Royen, Judith Schueler and Frank Veraart car- ried out the research and wrote reports on aspects of the history of research at DSM. Harry Lintsen compiled and edited a book on the basis of their work, which was published in 2000.1 This collective volume, written in Dutch, was aimed at a broad audience. I have reworked and extended it, and the result is this book. My reworking of the material has resulted in a stronger emphasis on R&D projects. I have also placed more emphasis on R&D in relation to established businesses. Additional research has deepened the cases mentioned in the Dutch book, and I have added two cases (caprolactam and fine chemicals). The scope of the lysine case has also been extended to include research on other amino acids, and attention is paid to the links between lysine and fine chemicals. The reworking and extensions provide a fresh perspective on the development of DSM and the role of industrial research in this development. The case of DSM may also appeal to an international audience. The company’s long and colourful history provides new insights into the history of R&D and the analysis of innovation processes. I have been fortunate in being able to use the material that had already been collected and the reports that formed the basis of the collective volume.2 I also used material collected by Piet Vincken. His unpublished manuscript on the history of DSM enabled me to resolve several loose ends.3 Ernst Homburg supplied me with his research on the establishment of caprolactam production and on industrial research at DSM in the 1990s. Our joint work on the history of DSM’s fertiliser business also provided input for this book.4 The urea case draws on my own previous work in this field and was part of my dissertation.5 Finally, I am grateful to Wim Hoogstraten (former director of DSM’s patents department) for compiling some patent statistics. I researched and wrote this book between September 2003 and Septem- 9 ber 2005. An able committee, consisting of Ernst Homburg (Maastricht University), Jacques Joosten (DSM), Siep Schaafsma (formerly DSM Research) and Keetie Sluyterman (Utrecht University) guarded both the process and the content of the work. I have profited from their comments, suggestions and critical questions. Siep’s careful reading of drafts helped me to avoid many chemical errors and provided me with useful point- ers for further research. He also provided me with quantitative data on the development of DSM’s research. At Eindhoven, Mila Davids and Jan Korsten acted as a sounding board for early testing of my ideas and took many organisational aspects of the project off my hands.

Load more