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Chemistry 4.0 Growth Through Innovation in a Transforming World Chemistry 4.0 | Table of Contents Chemistry 4.0 Growth through innovation in a transforming world Chemistry 4.0 | Table of contents Table of contents A new development in the chemical industry: the era of Chemistry 4.0 06 Incremental innovations and disruptive changes in the chemical sector 08 The digital transformation of the chemical industry 11 The chemical industry’s key role in the circular economy 15 Mutual enhancement between digitalization and circular economy 19 Recommendations 23 Contact 28 03 Chemistry 4.0 | Foreword by the VCI President Dr. Kurt Bock, President, German Chemical Industry Association (VCI) 04 Chemistry 4.0 | Foreword by the VCI President Foreword by the VCI President Chemical and pharmaceutical com- Digitalizing the chemical industry today in order to take advantage of panies in Germany have shown time offers new opportunities as well as opportunities through transforma- and again that they can successfully risks. Research and development, tion tomorrow. From this foundation, master the tectonic shifts in our com- manufacturing, and business models we have derived recommendations petitive environment; examples in will be transformed. It is not easy aimed at the association and its the 150 year old history of industrial to separate myths from real risks member companies, as well as poli- chemistry are changes in raw mate- and opportunities, take appropriate cy-makers. If we all work together, we rials, relocation of growth centers measures, and gain a competitive will be able to expand the role of the to emerging economies, and the call advantage. This transformation offers chemical industry as an innovation to make business more sustainable, great opportunities for the highly center for Germany. which has been receiving broad pub- developed chemical industry in Ger- lic support recently. many in terms of enhancing its global I would like to express my special competitiveness. The chemical and thanks to the many experts, The key to our competitiveness is pharmaceutical industry’s innovative particularly from the member com- the innovative power held in our processes, products, and services panies, who took part in numerous companies: new and improved make a significant contribution to sus- workshops and contributed to this molecules, production and business tainable development of our society. study, as well as the medium-sized processes. In Europe, our sector has Our sector will continue to be a tradi- enterprises that responded to the been characterized by globalization, tional supplier of materials, while our online survey. specialization, and focusing on the role as a service provider will grow in core business since the 1980s. We importance at the same time. Their knowledge and their assess- have now reached the next level: ment of the industry’s future have Chemistry 4.0. Digitalization and Against this background, the VCI, its made this study possible at all. circular economy are the key cha- member companies, and Deloitte racteristics, and these two elements Consulting have examined which will fundamentally alter the way we developments will influence the work, as well as support sustainable chemical and pharma business up management. to 2030, and what we need to do 05 Chemistry 4.0 | A new development in the chemical industry: the era of Chemistry 4.0 A new development in the chemical industry: the era of Chemistry 4.0 The chemical and pharmaceutical icals that until now had often been Circular economies will gain in impor- industry (in the following: chemical covered by German exports. These tance, and digitalization will lead to industry) is an important driver for changes mean a further increase in extensive changes in all sectors. These innovation and growth in the German competitive intensity for the chemical two core topics are of central impor- economy. However, fulfilling this role sector in Germany, both in its Euro- tance to the trends in the chemical in the long term will require significant pean home market and in the export sector up to 2030 and beyond. efforts; like all industries in Germany, markets: in Europe, import pressure the chemical and pharma sector is on base chemicals and intermediate As part of these changes, a new phase faced with elementary strategic and products from resource-rich regions of development is beginning in the structural challenges. will go up, while in export markets, German chemical industry. Following competition with local providers and industrialization and coal chemistry On the one hand, demand for chemical other importers will intensify. (Chemistry 1.0), the emergence of products in Western Europe will grow petrochemistry (Chemistry 2.0), and only modestly in the decades ahead, On the other hand, a paradigm change increasing globalization and speciali- moving the focus toward markets in in demand structures and public zation (Chemistry 3.0), the industry is Asia, South America, and, eventually, preferences has been taking place for a entering a new phase with Chemistry Africa. Since international and local while. The desire to use resources in an 4.0, in which digitalization, circular competitors are expanding their pro- efficient and environmentally friendly economy, and sustainability play key duction capacities there, and additional way has noticeable effects on energy roles (see diagram). capacities in resource-rich regions are supply and consumption habits. The to be expected, the whole competitive trend toward the Sharing Economy environment in the chemical industry is illustrates this transformation. By about to face a transformation. In addi- developing strategies to serve changing tion, manufacturers in developing and customer requirements, companies resource-rich countries are expanding make an important contribution toward their scope to include specialty chem- reaching UN sustainability goals. 06 Chemistry 4.0 | A new development in the chemical industry: the era of Chemistry 4.0 Development from Chemistry 3.0 to Chemistry 4.0 Chemistry 3.0 Chemistry 4.0 lobalization Specialization Digitalization Circular Economy Globalization, the European internal market, Drivers for growing competition from gas-based chemistry, Digital revolution, sustainability, climate protection, transformation the influence of financial markets on corporate closing material cycles strategies, commodification Intensive use of data, recycling of carbon-containing Increasing use of renewable raw materials and Raw materials waste, H from renewable energies in combination natural gas 2 with CO2 used to produce base chemicals New synthesis and production processes through Technology biotechnology and gene technology, enlargement Digitalization of manufacturing processes of individual processes Close cooperation between basic research in Decentralization of R&D in customer markets, Research universities and application-oriented research in utilization of Big Data, oint development with companies customers Internationalization of trade and on-site Corporate production abroad, specialization and growth in More flexible cooperation as part of economic net- structure SMEs, consolidation through M&A, creation of works, digital business models, and consolidation chemical parks Expanding product range, specialty chemicals Expanding the spectrum of value creation: chemical oriented to specific customer requirements, new sector becomes a supplier of extensive and Products drugs, replacement of traditional materials with sustainable solutions for customers and the chemical products environment Environmental protection integrated into produc- With Chemie3 (ecology, economy, and social affairs), Environment, tion, increasing product safety through expanded sustainability becomes a comprehensive model and Health and Safety review of material properties, Responsible Care future concept for the industry 07 Chemistry 4.0 | Incremental innovations and disruptive changes in the chemical sector Incremental innovations and disruptive changes in the chemical sector As part of this study, a systematic continue to offer growth opportunities analysis identified 30 trends that will in future. be of key importance to the chemical industry in Germany until 2030. These The chemical sector in Germany is trends were analyzed with regard to well-positioned to master the chal- the underlying drivers, and assessed lenges of incremental change. A strong according to their probable impact industry network in Germany, the inno- (see diagram). vative power of the chemical industry, and especially well-developed, focused, The results show that many innova- and customer-oriented medium-sized tions in important customer industries enterprises are key success factors. of the chemical industry, e.g. in the au- As such, these incremental changes tomotive, construction, and packaging continue to offer the chemical sector industries, will likely happen gradually. opportunities for growth, although any Specific examples of such fields of competitive advantages gained erode innovation are lightweight construction faster and faster due to intensifying using plastics and composite materials competitive pressure. in the automotive industry, and more energy-efficient construction mate- rials. These incremental innovation processes are part of the business and success models that already exist in the chemical industry in Germany, and will 08 Chemistry 4.0 | Incremental innovations and disruptive changes in the chemical sector Trends in the chemical industry up to 2030 Societal politically driven Genome editing in Renewable energy – medical applications
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